15th Apr 2008 07:01
Low & Bonar PLC15 April 2008 LOW & BONAR PLC Low & Bonar PLC announces Grass Yarns Joint Venture with Abu Dhabi Basic Industries Corporation Low & Bonar PLC ("Low & Bonar" or the "Group"), the international technicaltextiles and contract flooring manufacturer, and Abu Dhabi Basic IndustriesCorporation ("ADBIC"), today announce that they have established a joint venturecompany that will produce artificial grass yarns and other yarns. The jointventure is being established through a wholly-owned subsidiary of Low & Bonarand the Group will have a 75% economic share and operational control of theventure. Artificial grass yarn is one of the fastest growing product segments within Low& Bonar's Technical Textiles business, showing growth rates of over 15% peryear. This strong growth is driven by the increased use of artificial turf forsports pitches and the rapid expansion of use for landscaping due toenvironmental restrictions on water use. The joint venture company will build a new manufacturing plant in the Abu DhabiPolymers Park, an industry-specific economic zone being established by ADBIC inAbu Dhabi, and production is expected to start in 2009. The new facility willcomplement Low and Bonar's existing manufacturing plants in Scotland, Belgiumand China and will provide further capacity to support the anticipated growth inartificial grass yarns. The transaction will also allow the Group to benefitfrom additional sources of its principal raw materials and from ready access tonew markets in the Gulf and Middle East region. The total initial investment in the joint venture to establish its business andproduction facilities is estimated at US$25 million. Low & Bonar's committedcontribution in 2008 to the venture will amount to US$6 million, payable incash. The joint venture will manufacture products which are already part of Low& Bonar's portfolio and will distribute these products exclusively through theGroup's existing sales and distribution infrastructure. Paul Forman, Group Chief Executive of Low & Bonar, commented: "This new venturewill give us a strong position in one of the largest potential markets forartificial grass and allow us to satisfy the significant growth in globaldemand. The Middle East is also one of the fastest growing areas for many of ourother products such as specialist textiles used in civil engineering, where Low& Bonar already enjoys a world-leading position. The local presence with such ahigh calibre partner will reinforce our position in these markets and create newbusiness opportunities. It will also enable us to develop closer relationshipswith some of the world's largest polymer producers." Jim White, Chief Operating Officer, ADBIC, commented: "We are very excited to beable to announce this investment with Low & Bonar which creates the first ofseveral new businesses to be located in our recently announced Polymers Parkdevelopment. Low & Bonar's choice to invest with us and in Abu Dhabi is atestament to the attractive offering that ADBIC has developed, and we expect tomake further investments such as this in the future." The joint venture arrangements are subject to obtaining standard licensesrequired to conduct business in Abu Dhabi which are expected to be obtained byend of May 2008. The arrangements have customary provisions to resolve adeadlock between the partners. Low & Bonar would only be required to purchaseADBIC's stake in the event that the Group was in material or persistent breachof the joint venture arrangements or in certain circumstances relating todeadlock between the partners over key commercial issues. Low & Bonar wasadvised by Jasper Capital. ENDS For further information, please contact: Low & Bonar PLC +44 (0)20 7535 3180 Paul Forman, Group Chief Executive Kevin Higginson, Group Finance Director Hogarth Partnership Limited +44 (0)20 7357 9477 Rachel Hirst/Andrew Jaques/Ian Payne About Low & Bonar Low and Bonar is a world leading technical textiles and contract flooringmanufacturer, operating from over 20 sites in 9 countries. The Group is quotedon the London Stock Exchange and is committed to delivering shareholder valuethrough a strategy of organic and acquisitive growth. Recent acquisitionsinclude the acquisitions of Mehler Texnologies, the German-based manufacturer oftechnically coated fabrics, and Westbond, the specialist UK producer offusion-bonded carpet tiles. Low & Bonar comprises two divisions: Technical Textiles and Contract Flooring .The key characteristics of its businesses are that they manufacture added-valueproducts based on advanced technology and address markets with strong growthpotential. Many of Low & Bonar's products are leaders in their niche markets. The Technical Yarns business, which has formed the joint venture with Abu DhabiBasic Industries Corporation, forms part of Low & Bonar's Technical TextilesDivision and is one of the fastest growing segments within the Group. About Abu Dhabi Basic Industries Corporation (ADBIC) ADBIC is an industrial development and investment company created to facilitatethe expansion of sustainable industrial activity in Abu Dhabi in the base metals(aluminum, steel and copper) and petrochemicals sectors. Established in 2006, ADBIC is a wholly owned subsidiary of the Abu Dhabigovernment's General Holding Corporation. Current investments include: EmiratesSteel Industries, the largest and only integrated steel plant in the UAE; andAbu Dhabi Polymers Park - an industrial zone dedicated to the plasticsconversion industry with total output capacity of 1 million tonnes per annum.The park encompasses 4.1 sq kms and will include common services such astechnology and logistics centres. ADBIC supports economic diversity within the Emirate of Abu Dhabi through thedevelopment of industrial clusters. Through capacity building, co-operation withgroup companies, and joint ventures, ADBIC uses an integrated approach towardsbuilding industrial supply chains and creates opportunities through leveragingglobal competitive advantages. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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