PGI Buys Remaining Share Of PGI Argentina JV, Declares Intent To Buy Spain-based Nonwovens Business
Charlotte-based nonwovens manufacturer Polymer Group Inc. (PGI) has acquired the remaining
40-percent share in Dominion Nonwovens Sudamericana S.A. (PGI Argentina) from its partner in the
joint venture (JV), Guillermo E. Kraves. The company has operated as a JV since 1997, with PGI
owning a majority share since 1999. PGI Argentina, based near Buenos Aires, operates a multi-beam
spunmelt line, extrusion line, and a new wide-width, multi-beam spunbond line. The facility
provides nonwovens to the hygiene and industrial markets in the Mercosur region.
"This investment is a signal of our confidence in the future of our operations in Latin America and the strategic significance of the operations in Argentina," said Veronica "Ronee" Hagen, CEO, PGI. "We have successfully positioned ourselves with supply in each of the major trade regions of Latin America and bringing the Argentina joint venture fully into the PGI ownership structure gives us the ability to fully capitalize on future growth opportunities."
In related company news, PGI has signed an agreement stating its intent to purchase the nonwovens businesses of Spain-based Tesalca-Texnovo from Grupo Corinpa, S.L. The purchase, expected to be complete by the end of November, will occur in two phases. During phase one, PGI will purchase working capital and operations of the nonwovens businesses in exchange for common stock equal to a 5-percent share in PGI, during phase two, the company will then assume debts and purchase the remainder of Tesalca-Texnovo in exchange for common stock equal to an additional 1.75-percent share in PGI. Upon completion of the transaction goes, a long-term partnership will be established, and Grupo Corinpa will have a presence on PGI's Board of Directors.
Tesalca-Texnovo realized sales of approximately $87 million in 2008. The company supplies hygiene, medical, industrial and agricultural markets, and is the only company in Spain that produces spunbond polypropylene nonwoven fabrics. The businesses, which produce more than 50,000 metric tons of nonwovens per year using its six Reifenhäuser Reicofil lines, will be known as PGI Spain and will operate as a wholly owned subsidiary of PGI. Once the purchase is complete, PGI will have a global capacity for spunlaid fabrics of more than of 285,000 metric tons.
"Through this transaction, the Tesalca-Texnovo businesses will grow under the ownership of a large, globally recognized premier nonwovens producer," said Jose Durany, managing director, Tesalca-Texnovo. "This will be a good union between companies with similar goals. We look forward to being long-term partners with PGI."
November 3, 2009