Business
Joint Venture in Asia
Joint Venture in Asia.
About this update from Zotefoams Plc
[{"type":"text","content":"\n \nRNS Number : 2052J Zotefoams PLC 12 July 2013 \n \n\n12 July 2013\n \n \nZotefoams plc\n(\"Zotefoams\" or \"the Company\")\n \nJoint Venture in Asia\n \n12 July 2013 - Zotefoams, which manufactures and sells high-performance foams, announces that it has entered into a joint venture with Inoac Corporation of Japan for the manufacture and exclusive sale of its Azote® polyolefin products in Asia and Australasia. \n \nOn 11 July 2013, Zotefoams signed a joint venture agreement with Inoac Corporation (\"Inoac\") for the manufacture and exclusive sale of its Azote® cross-linked polyolefin foam products (\"Products\") in Asia and Australasia (the \"Territory\"). Inoac Corporation has been a distributor of Zotefoams' Products in the region since 2007.\n \nZotefoams and Inoac (\"the Parties\"), effective from 1 July 2013, have established a 50/50 owned sales joint venture company in Hong Kong (\"S-JV\"). The S-JV will be managed by Zotefoams' existing Asian polyolefin sales team. Initially, the S-JV will sell Products manufactured at Zotefoams' Croydon site in the UK and shipped direct to the S-JV's customers in the Territory.\n \nIn parallel, the Parties will invest in a new manufacturing facility in South Korea to supply the S-JV with Products. This facility, based adjacent to an existing Inoac manufacturing site, will be similar to Zotefoams' factory in Kentucky, USA. Non-expanded intermediate product will be supplied from the UK for expansion in South Korea, which significantly improves the economics of foam supply to customers in the Territory. The Parties will establish a 50/50 owned manufacturing joint venture (\"M-JV\") managed by Inoac. It is anticipated that the M-JV factory, with a total investment of approximately US$ 8 million, will commence operations during 2015.\n \nZotefoams initial capital contribution to the S-JV is US$0.3m and to the M-JV US$0.5m, which is expected to be followed by a further contribution of US$1.4m to the M-JV around the end of 2014. Zotefoams expects these contributions to be made from existing cash facilities. Inoac's contribution to the two companies will match that of Zotefoams and in addition Inoac will purchase the major capital machinery for lease to the M-JV.\n \nThe Territory covers ...