Fiberweb Plc. (FWEB.L) announced that contracts have been signed for Fiberweb Geosynthetics to invest 2 million pounds to increase its stake from 26% to 65% in its existing geotextiles joint venture in Gujarat, India.
Terram India, based in a duty-free zone near Mundra, fully commissioned its manufacturing operations during 2012, utilising a Terram geotextile spunbond line relocated from Fiberweb's Terram operations in the UK.
The unique Terram spunbond process produces geotextiles and has long been a key component in many leading geocomposites, being utilised as a trusted element in road, rail and building foundations, as well as many other construction projects.
The investment will enable expansion at Terram India, including the addition of value-added geocomposite manufacturing capability. On completion, Fiberweb will consolidate 3 million pounds of debt associated with Terram India.
The transaction is expected to be earnings-neutral in 2013 and to be accretive in 2014. Completion is expected during July 2013.
In addition, Fiberweb confirmed that trading continues to develop as expected. Operational efficiencies, cost reduction and mix improvement are delivering growth in both operating profit and margin, despite weaker sales against a strong comparative period. Working capital remains under control, cashflow continues to be strong and the Group has made progress towards its medium-term financial targets.
A specialised hygiene line was sold to Fitesa as planned at the end of June for 3 million pounds, which will reduce second half sales by around 3.5 million pounds.
The company expects an improved like-for-like sales performance in the remainder of the year, with growing output of construction products and the impact of enhancements to the product range in filtration and technical specialties.
The company expects to announce its first-half results on 2nd August 2013.
by RTT Staff Writer
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