21st Sep 2010 07:00
21 September 2010 Umeco plc Joint Venture in China
Umeco plc, an international provider of supply chain services and advanced composite materials primarily to the aerospace & defence industries, today announces that its Process Materials business has entered into a joint venture with its Chinese distributor Shanghai Leadgo Technology Co., Ltd. ("Leadgo"). The joint venture agreement is subject to approval from Chinese authorities. It is anticipated this will be granted within the next two months.
The joint venture company (the "JV"), to be named Shanghai Umeco Composites Co., Ltd., will be 51% owned by Umeco Composites Limited, with Leadgo having a 49% stake. The JV will establish a facility in Shanghai to manufacture vacuum bagging films for the rapidly growing Chinese wind energy market. The new facility should be fully operational by the end of 2011.
Umeco currently manufactures the films supplied to Leadgo for the Chinese market at its facility in Italy ("IPM"). Umeco expects that the global growth in the wind energy market will allow IPM to back-fill its production capacity once production for the Chinese market moves to the JV.
Umeco estimates its total investment in the JV will be RMB28m (c. USD4.1m) comprising a cash investment of USD2.4m for its equity stake in the company and a USD1.7m shareholder loan facility. Leadgo will also make a similar investment and provide a similar loan. At the outset, the JV will have no other assets. IPM will receive a technology royalty from the JV following the commencement of production.
The JV is forecast to be profitable shortly after production commences; in the start-up period, costs are expected to be modest.
Clive Snowdon, CEO of Umeco, stated: "The continued growth of the global wind energy market, despite the economic downturn, reflects the on-going transition to generating power from renewable sources. This joint venture represents another important step in building Umeco's capability in the world's largest wind energy market."
END Umeco plc Tel: +44 (0) 1926 331 800 Clive Snowdon, Chief Executive Doug Robertson, Finance Director
www.umeco.com Tulchan Communications Tel: +44 (0) 207 353 4200 Christian Cowley Lucy Legh Notes
Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future events or results referred to in these forward looking statements. Unless otherwise required by applicable law, regulation or accounting standard, we do not undertake any obligation to update or revise any forward looking statements, whether as a result of new information, future developments or otherwise. Nothing in this announcement should be construed as a profit forecast or estimate.
Further Information on Umeco plc
Umeco is a leading innovator in distribution and supply chain management to the aerospace & defence industries, harnessing new methods for enhancing its customers' performance and profitability. Umeco also has significant manufacturing interests in advanced composite materials for a growing range of applications in its core aerospace and defence markets and in other high performance technology industries such as motor sport, automotive and wind energy.
Listed on the London Stock Exchange, Umeco had revenue from continuing operations of £409.4 million in the year to 31 March 2010.
Umeco is managed through three business streams:-
Umeco Composites - Structural Materials
Development, manufacture and supply of advanced composite materials. Specialising in the manufacture of high performance composite materials for a diverse range of industries such as aerospace, marine, motor sport & automotive, construction, wind energy and leisure sports. Structural Materials has manufacturing operations in the UK and the US, and distributes its products worldwide. Customers include Boeing, Airbus, manufacturers of high performance super cars and Formula 1 teams.
Umeco Composites - Process Materials
Development, manufacture and supply of vacuum bagging materials to the composites industry and other markets, providing a wide range of materials and technical support to a growing number of international customers. Process Materials has manufacturing operations in Italy and France, and value-added distribution facilities in the UK and the US. It has a global distribution network. Customers include Airbus, Boeing and manufacturers of wind turbine blades.
Umeco Supply Chain
A leading international provider of value-added distribution and supply chain outsourcing services to customers in the aerospace & defence market. With its specialisation in the supply of small and medium value components and sophisticated IT systems, its growing global customer base can enjoy significant operational, cost and working capital benefits. The Supply Chain businesses trade globally as Pattonair. Customers include Rolls-Royce plc, BAE Systems, Safran Group, Parker Aerospace, Goodrich, Thales Aerospace, Turbomeca, ATK, Lockheed Martin and the US Department of Defense.
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