| Wed 26 Sep 2007, 16:30 | | RLF - Rolfes - Additional resin plant and manufact |
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RLF
RLF
RLF - Rolfes - Additional resin plant and manufacturing agreement
ROLFES TECHNOLOGY HOLDINGS LIMITED
(Registration number 2000/002715/06)
Share Code: RLF
ISIN:ZAE000096202
("Rolfes" or "the Group")
www.rolfesza.com
ADDITIONAL RESIN PLANT AND MANUFACTURING AGREEMENT
Introduction
Rolfes Chemicals (Pty) Limited, a subsidiary of Rolfes, has secured a second
resin plant, situated in Durban, from Paintchem (Pty) Limited ("Paintchem"),
effective 1 November 2007. Rolfes has also signed a long term product supply
agreement with Paintchem.
Rationale for transaction and key terms
Rolfes secured the Paintchem resin plant by way of a lease agreement for 5
years, with an option to renew for a further 5 years. Rolfes also has an option
to an outright purchase of the plant in the event that Paintchem wish to dispose
of it. The agreement is further subject to conditions normal to a transaction
of this nature. Other than a monthly lease payment, Rolfes has made no upfront
capital payment in respect of the new resin plant facilities
Rolfes has signed a long term supply agreement with Paintchem, in terms of which
Rolfes will manufacture certain hydroxyl acrylic and other resin products for
Paintchem on a cost plus margin basis. In terms of the supply agreement,
Paintchem guarantees a minimum quantity of product offtake from Rolfes per
annum, which quantity equates to up to 40% of the total plant capacity. The
remaining plant capacity will be used to manufacture alkyd, hydroxy and
woodfinish resin products for Rolfes` larger Durban based clients.
The transaction not only more than doubles the resin making capacity of Rolfes
but also provides the Group with a strategic foothold in the large and lucrative
Kwazulu-Natal market. The transaction will free up to 60% of the Alberton plant
capacity, which capacity will be used to further grow the resin business in the
Gauteng and adjacent areas.
Midrand
26 September 2007
Registered office:
The Summit
269 16th Road
Randjiespark
Midrand
Executive Directors Non-Executive Directors
E van der Merwe(Chief Executive Officer) BT Ngcuka (Chairman)
AJ Greeff (Financial Director) AJ Fourie
L Dyosi
Designated advisor
PSG Capital (Pty) Limited
Date: 26/09/2007 16:30:01 Produced by the JSE SENS Department.
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