Jasper Capital advises on Low & Bonar PLC Grass Yarns joint venture with Abu Dhabi
- 15th April 2008

Low & Bonar PLC -Low & Bonar PLC (“Low & Bonar” or the “Group”), the international technical textiles and contract flooring manufacturer, and Abu Dhabi Basic Industries Corporation (“ADBIC”), today announce that they have established a joint venture company that will produce artificial grass yarns and other yarns. The joint venture is being established through a wholly-owned subsidiary of Low & Bonar and the Group will have a 75% economic share and operational control of the venture.

Artificial grass yarn is one of the fastest growing product segments within Low & Bonar’s Technical Textiles business, showing growth rates of over 15% per year. This strong growth is driven by the increased use of artificial turf for sports pitches and the rapid expansion of use for landscaping due to environmental restrictions on water use.

The joint venture company will build a new manufacturing plant in the Abu Dhabi Polymers Park, an industry-specific economic zone being established by ADBIC in Abu Dhabi, and production is expected to start in 2009. The new facility will complement Low and Bonar’s existing manufacturing plants in Scotland, Belgium and China and will provide further capacity to support the anticipated growth in artificial grass yarns. The transaction will also allow the Group to benefit from additional sources of its principal raw materials and from ready access to new markets in the Gulf and Middle East region.

The total initial investment in the joint venture to establish its business and production facilities is estimated at US$25 million. Low & Bonar’s committed contribution in 2008 to the venture will amount to US$6 million, payable in cash. The joint venture will manufacture products which are already part of Low & Bonar’s portfolio and will distribute these products exclusively through the Group’s existing sales and distribution infrastructure.

Paul Forman, Group Chief Executive of Low & Bonar, commented: “This new venture will give us a strong position in one of the largest potential markets for artificial grass and allow us to satisfy the significant growth in global demand. The Middle East is also one of the fastest growing areas for many of our other products such as specialist textiles used in civil engineering, where Low & Bonar already enjoys a world-leading position. The local presence with such a high calibre partner will reinforce our position in these markets and create new business opportunities. It will also enable us to develop closer relationships with some of the world’s largest polymer producers.”

Jim White, Chief Operating Officer, ADBIC, commented: “We are very excited to be able to announce this investment with Low & Bonar which creates the first of several new businesses to be located in our recently announced Polymers Park development. Low & Bonar’s choice to invest with us and in Abu Dhabi is a testament to the attractive offering that ADBIC has developed, and we expect to make further investments such as this in the future.”

The joint venture arrangements are subject to obtaining standard licenses required to conduct business in Abu Dhabi which are expected to be obtained by end of May 2008. The arrangements have customary provisions to resolve a deadlock between the partners. Low & Bonar would only be required to purchase ADBIC’s stake in the event that the Group was in material or persistent breach of the joint venture arrangements or in certain circumstances relating to deadlock between the partners over key commercial issues. Low & Bonar was advised by Jasper Capital.

ENDS

For further information, please contact:

Low & Bonar plc +44 (0)20 7535 3180
Paul Forman, Chief Executive
Kevin Higginson, 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 flooring manufacturer, operating from over 20 sites in 9 countries. The Group is quoted on the London Stock Exchange and is committed to delivering shareholder value through a strategy of organic and acquisitive growth. Recent acquisitions include the acquisitions of Mehler Texnologies, the German-based manufacturer of technically coated fabrics, and Westbond, the specialist UK producer of fusion-bonded carpet tiles.

Low & Bonar comprises two divisions: Technical Textiles and Contract Flooring. The key characteristics of its businesses are that they manufacture added-value products based on advanced technology and address markets with strong growth potential. Many of Low & Bonar’s products are leaders in their niche markets.

The Technical Yarns business, which has formed the joint venture with Abu Dhabi Basic Industries Corporation, forms part of Low & Bonar’s Technical Textiles Division 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 facilitate the 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 Dhabi government’s General Holding Corporation. Current investments include: Emirates Steel Industries, the largest and only integrated steel plant in the UAE; and Abu Dhabi Polymers Park - an industrial zone dedicated to the plastics conversion industry with total output capacity of 1 million tonnes per annum. The park encompasses 4.1 sq kms and will include common services such as technology and logistics centres.

ADBIC supports economic diversity within the Emirate of Abu Dhabi through the development of industrial clusters. Through capacity building, co-operation with group companies, and joint ventures, ADBIC uses an integrated approach towards building industrial supply chains and creates opportunities through leveraging global competitive advantages.

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