1st Oct 2007 07:05
Cookson Group PLC01 October 2007 COOKSON GROUP PLC FURTHER £20M CERAMICS EXPANSION IN CHINA CAPITAL MARKETS DAY Cookson Group plc ("Cookson"), a leading materials science company, todayannounces three new expansion projects in China and a further rationalisationproject in the US, which will combine further to enhance the prospects ofVesuvius, Cookson's Ceramics division. Commenting on these new initiatives, Francois Wanecq, Chief Executive of theCeramics division, said: "The three expansion projects - totalling £20 million of investment - willfurther enhance Vesuvius' local presence in the Chinese market. "Through new joint ventures we will strengthen our relationship with two ofChina's leading steel producers and, through the significant expansion of ourSolar CrucibleTM capacity, we will be able to capitalise further on the highlevels of growth in the solar power industry. "In addition to these investments in the high-growth emerging market of China,we are continuing to restructure in maturing markets with the planned closure ofa further production facility in the US." Joint Venture agreement with Wuhan Iron & Steel Corporation ("WISCO") Since 2003, Vesuvius has operated a 50/50 Joint Venture with WISCO, China'sfourth largest steel producer, producing slide-gate refractories. Thisoperation had revenue of £6 million in 2006. Based on this success, a further 50/50 Joint Venture between the parties hasbeen formed for the production of VISOTM, Vesuvius' range ofisostatically-pressed alumina-carbon products used to control and protect theflow of molten metal in the continuous casting steelmaking process. The newJoint Venture, to be managed by Vesuvius, will involve the construction of a newfacility in Wuhan, Hubei Province. Around half of the production will bededicated to supplying VISOTM products to satisfy the anticipated expansion ofWISCO's own steel-making capacity, with the remainder available to Vesuvius tosell to other Chinese steel producers. Vesuvius' share of the investment in the new facility will be £2 million and thefacility is expected to be completed by the second quarter of 2008. Joint Venture agreement with Anshan Iron and Steel Corporation Group ("Angang") Vesuvius has recently signed a Letter of Intent with Angang for the formation ofa 50/50 Joint Venture to supply various refractory products to Angang.Following the completion of the proposed merger with Benxi Iron & Steel, Angangwill be China's largest steel producer and has plans to significantly increaseits steel production over the next five years from the current level of 15million tons per annum to between 40 and 50 million tons. The Joint Venture, tobe managed by Vesuvius, will supply Angang with a significant proportion of itstotal magnesia-carbon brick, magnesia based monolithics and VISOTM requirementsfrom these three new facilities. Vesuvius' share of the investment in the three new facilities, to be built inLiaoning Province, will be £7 million with completion expected by the end of2008. Construction of new £11 million Solar CrucibleTM facility in Jiangsu Province ("Sunrise") Cookson has completed two new Solar CrucibleTM facilities so far in 2007, inChina (Wei Ting, Jiangsu Province) and Poland (Skawina), both of which areexpected to be at full capacity by the first quarter of 2008. In August 2007,it was announced that a further new facility is to be built in Moravia, CzechRepublic for completion by the first quarter of 2008. Each of these facilitiesmanufacture Solar CruciblesTM used in the manufacture of photovoltaic ("solar")cells. In response to continued strong growth in the solar power industry, anadditional facility ("Sunrise") is to be constructed in Jiangsu Province, closeto Vesuvius' existing Solar CrucibleTM facility in Wei Ting, capable ofproducing around 40,000 Solar CruciblesTM annually. The total investment in thenew facility will be just over £11 million and it is expected to be completed bythe end of 2008. All production from this facility will be supplied, under afive year agreement, to a new £245 million solar cell factory to be constructedin Jiangsu Province by Glory Silicon Energy ("GSE"). GSE's factory willrepresent one of the largest facilities of its type in the world, capable ofproducing solar cells generating 1,500 megawatts of electricity per annum. The solar power industry is currently experiencing very strong, double digit,growth which has accelerated during 2007 as supplies of polysilicon feedstockhave increased. This new investment, coupled with the other investments inSolar CrucibleTM production, will enable Cookson to continue to benefit fromthis strong demand and maintain its leading market position as a key supplier tothe solar power industry. Closure of Buffalo (New York) facility As part of the programme of restructuring in maturing markets, Vesuvius'facility in Buffalo, New York is to be closed. Negotiations with the relevantunions on the closure terms were recently concluded and there will be a phasedrun-down of activity through 2008 with final closure by year-end. The facility,which manufactures isostatically-pressed foundry crucibles, has relatively highlabour costs and production is to be relocated to Vesuvius' existing facility inMonterrey, Mexico. The closure, which will result in cash-relatedrationalisation costs of £5 million in 2007, is expected to generate costsavings of £1 million per annum from the beginning of 2009. Theserationalisation costs are included within the expected £10 million totalrationalisation charge for 2007 for Cookson as a whole. Capital Markets Day Cookson is tomorrow (Tuesday, 2 October) hosting a Capital Markets Day at itsCeramics facility in Skawina, Poland. Presentations will be given on the Ceramics division, including presentations onCentral Europe and Solar CruciblesTM. Copies of the presentations will beavailable on Cookson's website www.cooksongroup.co.uk from 11.00am tomorrow. An update on trading was provided within the interim results announcement on 2August 2007 and no new material trading information will be provided attomorrow's presentations. - Ends - For further information please contact: Shareholder/analyst enquiries: Nick Salmon, Chief Executive Cookson Group plc Mike Butterworth, Group Finance Director Tel: +44 (0)20 7822 0000 Anna Hartropp, Investor Relations Manager Media enquiries: Hogarth PartnershipJohn Olsen Tel: +44 (0)20 7357 9477 +44 (0) 7770 272082 Note to Editors: For 2006, 23% of Cookson's revenue and 42% of its trading profit came from itsoperations in Asia-Pacific, of which China is the largest single country. About Cookson Group plc: Cookson Group plc is a leading materials science company operating on aworldwide basis in Ceramics, Electronics and Precious Metals markets. The Ceramics division is the world leader in the supply of advanced flow controlrefractory products and systems to the global steel industry and a leadingsupplier of specialist ceramics products glass, solar and foundry industries. Itis also the regional leader in the US, UK and Australia in the supply andinstallation of monolithic refractory linings. The Electronics division is a leading supplier of advanced surface treatment andplating chemicals and assembly materials to the automotive, industrial,construction and electronics markets. The Precious Metals division is a leading supplier of fabricated precious metals(primarily gold, silver and platinum) to the jewellery industry in the US, theUK, France and Spain. Products include alloy materials, semi-finished jewellerycomponents and finished jewellery. Forward looking statements This announcement and the investor presentations to be given on the CapitalMarkets Day contains certain forward looking statements which may includereference to one or more of the following: the Group's financial condition,results of operations, cash flows, dividends, financing plans, businessstrategies, operating efficiencies or synergies, budgets, capital and otherexpenditures, competitive positions, growth opportunities for existing products,plans and objectives of management and other matters. Statements in this document that are not historical facts are hereby identifiedas "forward looking statements". Such forward looking statements, including,without limitation, those relating to the future business prospects, revenue,working capital, liquidity, capital needs, interest costs and income, in eachcase relating to Cookson, wherever they occur in this document, are necessarilybased on assumptions reflecting the views of Cookson and involve a number ofknown and unknown risks, uncertainties and other factors that could cause actualresults, performance or achievements to differ materially from those expressedor implied by the forward looking statements. Such forward looking statementsshould, therefore, be considered in light of various important factors.Important factors that could cause actual results to differ materially fromestimates or projections contained in the forward looking statements includewithout limitation: economic and business cycles; the terms and conditions ofCookson's financing arrangements; foreign currency rate fluctuations;competition in Cookson's principal markets; acquisitions or disposals ofbusinesses or assets; and trends in Cookson's principal industries. The foregoing list of important factors is not exhaustive. When relying onforward looking statements, careful consideration should be given to theforegoing factors and other uncertainties and events, as well as factorsdescribed in documents the Company files with the UK regulator from time to timeincluding its annual reports and accounts. Such forward looking statements speak only as of the date on which they aremade. Except as required by the Rules of the UK Listing Authority and the LondonStock Exchange and applicable law, Cookson undertakes no obligation to updatepublicly or revise any forward looking statements, whether as a result of newinformation, future events or otherwise. In light of these risks, uncertaintiesand assumptions, the forward looking events discussed in this announcement mightnot occur. Cookson Group plc, 165 Fleet Street, London EC4A 2AE Registered in England and Wales No. 251977 www.cooksongroup.co.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Vesuvius