Morgan's Thermal Ceramics division ('Thermal') has reached an agreement to enter into a Joint Venture in China with Hubei Kailong Chemical Group Co. Ltd by acquiring a 70% stake in Hubei Kailong's ceramic fibre business. The consideration is a total of RMB 30.4 million (US$3.7m), to be satisfied by RMB 25.4m (US$3.1m) of cash and the remainder being the licensing of know-how and technology. The Joint Venture will trade under the name Morgan Kailong (Jingmen) Thermal Ceramics Co. Ltd. ('Kailong'). The transaction remains subject to the completion of local approvals.
Kailong produces high temperature insulation fibres and ancillary products, and is based in Jingmen City, Hubei province, close to the 3 Gorges Dam.
Thermal will be adding their world-class technology and know-how to the existing Hubei Kailong Ceramic Fibre business. The Joint Venture will enable Thermal to increase its presence in China and substantially increase its production in low-cost areas.
This is the second Chinese Joint Venture that Morgan has announced in the last twelve months. Morgan's Magnetics division reached an agreement in August 2004 to establish a Chinese Joint Venture that will trade under the name SANVAC. SANVAC will produce sintered Rare Earth permanent magnets, which are used in applications in electric motors, generators and consumer products.
Warren Knowlton, Chief Executive Officer, commented, 'These two Joint Ventures strongly support our target of increasing our presence in China. The strategic alliances with well-respected Chinese partners mean that we are well placed to align our superior technology with their knowledge of local production'
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