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PEGAS Nonwovens announces € 60 million investment in Egypt

01 Jun '11

3 min read

PEGAS NONWOVENS announces its intention to build a new production plant in Egypt. For this purpose steps have been taken for the establishment of a new company PEGAS NONWOVENS EGYPT LLC. The Company will have an initial share capital equivalent to EUR 1.7 million and will be 100% owned by PEGAS Group.

"The establishment of the company is the result of successful negotiations with a major customer, who expressed interest in a supply arrangement for our products to its production plants in the Middle East. We have received a preliminary award letter for long term deliveries to these plants", said František Rezác, member of the Board of Directors of PEGAS NONWOVENS SA and CEO of PEGAS NONWOVENS s.r.o., and who added: "After careful assessment of all aspects of the project as a whole and after more than a year's research of the business environment in Egypt, we have now established a subsidiary there, which will be used for the execution of this investment. Currently we consider that the most likely location for the plant will be in the industrial zone in the City of 6th October, not far from Cairo and we are now in the process of securing a suitable land parcel.

The investment in Egypt for the first phase of the project is planned to be in the order of EUR 55-60 million. The final confirmation of this investment is subject to the closing of the definitive contract with the customer, which should take place some time in the next few months.

"The conclusion of the contract that is being prepared would enable us to substantially fill the planned production capacity. Additionally, the construction of the Egyptian plant also opens up many new opportunities in the very promising markets of North Africa, the Middle East and Asia", said František Rezác.

In the medium term time horizon PEGAS NONWOVENS plans to build two production lines in Egypt. The first production line should have an annual capacity of approximately 20 thousand tonnes (depending on the product portfolio) and it is expected to be commissioned in the second half of 2013. In the case of favourable market conditions in the region, the Company expects to expand the plant by installing a second production line in 2015-2016, with which the total capacity of the Egyptian plant would grow to 45-50 thousand tonnes.

PEGAS NONWOVENS SA, is a holding company based in Luxembourg with operating companies based in Znojmo and Bucovice, Czech Republic. PEGAS NONWOVENS is a manufacturer of polypropylene / polyethylene nonwoven textiles for the hygiene, industrial, construction, agricultural, medical and other specialized sectors. These textiles are primarily used for the manufacture of baby diapers, feminine hygiene and adult incontinence products. The Company is active in developing new products demanded by the market and thereby maintains its position of technology leader in the European nonwovens market. PEGAS NONWOVENS currently has over 400 employees.

PEGAS NONWOVENS