Friday 20th January 2012
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Nuplex Industries, the specialty resins maker, has signed up to a joint venture with Russian paint and resins manufacturer KVIL.
Nuplex will spend $5.7 million in working capital to set up the 50-50 partnership, which is expected to be formed in the first quarter of this year. The deal will open up access to the growing Russian market, according to chief executive Emery Severin.
“Entering into Russia through a joint venture enables us to take a low risk approach to building our presence in this emerging market” Severin said in a statement.
The joint venture also allows for a resin manufacturing site to be built in Belgorod, Russia, in the next two years, with estimates putting the cost of a new building site at $32 million.
“We will have the opportunity to build on the-the-ground experience before committing to a larger investment in a manufacturing site” said Severin.
Nuplex was on a spending spree in 2011, purchasing Viverso in Europe for 75 million euros from Bayer MaterialSciences, and spending A$23.5 million on Acquos’ Masterbatch business in Australia.
Shares in Nuplex fell 1.3 percent to $2.37 in trading today, and have been in decline since February last year, when they hit $3.72.
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