1 February 2011 – Low & Bonar PLC (“L&B” or the “Group”), the international performance materials group, and National Petrochemical Industrial Company (“NATPET”), a subsidiary of Alujain Corporation (“Alujain”), today announce that they have agreed the terms on which they are to establish a joint venture company in Saudi Arabia for the design, manufacture and sale of geotextile products for the fast growing civil engineering markets in the Middle East and the Indian subcontinent.
The joint venture company will build a new manufacturing plant at a site near to NATPET’s polypropylene production facility in Yanbu, in western Saudi Arabia, and will benefit from a long term supply agreement with NATPET.
L&B will have a 50% equity interest in and shared operational control of the venture with NATPET. Each partner’s committed contribution to the venture will be SAR32 million (approximately £5.4 million), payable in cash during 2011, with L&B’s contribution being funded from its existing resources. The venture is expected to be earnings enhancing for L&B in 2013, in its first full year of operation.
Alujain is a public company in Saudi Arabia with a substantial stake held by Xenel Industries, a diversified industrial holding company based in Jeddah. Alujain leverages Saudi Arabia’s significant hydrocarbon resources in developing world-scale energy intensive industries.
The joint venture arrangements are subject to obtaining standard licences required to conduct business in Saudi Arabia, which are expected to be obtained by mid 2011.
Steve Good, Group Chief Executive of L&B, commented: “We are delighted to be partnering with such a well respected Saudi Arabian company. The joint venture is well positioned to take full advantage of the high growth geotextile markets in the Middle East and the Indian subcontinent given its unparalleled technological, marketing and raw material strength. The venture increases the Group’s presence in fast growing emerging markets and is a further step in our development as a global performance materials group.”
Marwan Nusair, President, Alujain, commented: “The geotextiles joint venture is our first downstream venture under NATPET with a view to developing value-added products, creating employment opportunities for Saudis and bringing new technology to the Kingdom. We are proud to have joined hands with a leading player in the geotextiles business.”
CONTACTS
Low & Bonar PLC
+44 (0) 20 7535 3180
Steve Good, Group Chief Executive
Mike Holt, Group Finance Director
www.lowandbonar.com
MHP Communications
+44(0) 020 3128 8100
Andrew Jaques / Rachel Hirst / Ian Payne
Forward looking statements
This announcement includes statements that are, or may be deemed to be, “forward looking statements”. These forward looking statements can be identified by the use of forward looking terminology, including, but not limited to, the terms “believes”, “estimates”, “anticipates”, “expects”, “may”, “will”, “would”, “could” or “should” or, in each case, their negative or other variations or comparable terminology. These forward looking statements include matters that are not historical facts.
By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward looking statements are not guarantees of future performance. The Group’s actual results of operations, financial condition and liquidity may differ materially from the impression created by the forward looking statements contained in this announcement. In addition, even if the results of operations, financial condition, and liquidity are consistent with the forward looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. Important factors that could cause these differences include, but are not limited to: changes in the competitive framework in which the Group operates and its ability to retain market share; the Group’s ability to generate growth or profitable growth; the Group’s ability to generate sufficient cash to service its debt; the Group’s ability to control its capital expenditure and other costs; significant changes in exchange rates, interest rates and tax rates; significant technological and market changes; future business combinations or dispositions; and general local and global economic, political, business and market conditions. In light of these risks, uncertainties and assumptions, the events described in the forward looking statements in this announcement may not occur.
Other than in accordance with its legal or regulatory obligations, the Group does not undertake any obligation to update or revise publicly any forward looking statement, whether as a result of new information, future events or otherwise.
