CRM
CRM
Ceramic: Intention to invest R70 million in plant and capacity expansion at
Betta
Ceramic Industries Limited
(Reg.No. 1982/008520/06)
Incorporated in the Republic of South Africa
("Ceramic" or "the Group")
Share code: CRM & ISIN: ZAE000008538
VOLUNTARY ANNOUNCEMENT: INTENTION TO INVEST R70 MILLION IN PLANT AND CAPACITY
EXPANSION AT BETTA SANITARYWARE ("BETTA")
Shareholders are advised that the Board of Ceramic Industries has approved the
commissioning of an expansion programme of Betta Sanitaryware"s existing
facilities, in order to meet market demand. Betta manufactures a complete range
of vitreous china sanitaryware.
Capital of R70 million has been allocated and will be utilised for new
equipment. The programme will be funded through the Group"s cash reserves.
RATIONALE FOR THE INVESTMENT
Demand for sanitaryware outstrips supply in South Africa, and is forecast to
continue to do so for the foreseeable future. Betta"s current production
capacity is 1.4 million pieces of sanitaryware per year, which entire production
is absorbed - predominantly by the local market, and to a lesser extent by
exports to Southern Africa. The planned expansion will increase Betta"s
capacity to approximately 2 million pieces per annum.
The strong demand for sanitaryware is based on sustained growth of the housing
market, boosted by government"s sanitation, water and infrastructure programmes;
the increased cost of imports, and the limited number of manufacturers in this
sector in South Africa.
Betta"s products have traditionally been directed at the lower end of the market
through pricing, but recent product innovations have facilitated a migration
into the middle segment. New product ranges have been favourably received by
the expanded target market, which further substantiates capacity expansion.
The planned upgrade will simultaneously optimise efficiencies in the plant,
whilst creating a platform for local growth in the short term, and enhance
export capacity over the longer term.
The expansion programme will commence at the end of the first quarter of 2007
and the additional capacity is forecast to be brought on stream by January 2008.
As such, the impact of the investment on the group"s results for FY2007 will not
be material.
Vereeniging
07 December 2006
Sponsor
Nedbank Capital
Date: 07/12/2006 09:00:04 AM Produced by the JSE SENS Department
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