Dutch deal for resins producer

By PAUL PANCKHURST

A resins company mainly owned by New Zealand's "mum and dad" investors - Nuplex Industries - is set to become a $1 billion-turnover global player.

Nuplex was founded in Auckland as Floor Tiles and Parquet in 1956.

The company makes the resins used by other manufacturers, such as paint, printing ink and textile businesses.

On Friday night, it announced a deal to buy a business in the Netherlands, Coatings Resins, from Akzo Nobel for $202 million.

That follows moves by the company in the 1990s into manufacturing in Australia and Vietnam and this year into manufacturing in China.

It also follows previous major acquisitions - including one where Nuplex swallowed a company bigger than itself.

"We're quite used to making sizeable acquisitions and making them work," said managing director John Hirst from Sydney yesterday.

Nuplex is listed in Australia and New Zealand but 92 per cent of the shares are held here - with about 70 per cent of the company in the hands of small shareholders.

However, the company's operations are run from Australia, the company's biggest source of revenue.

The deal will be funded by short-term loans from Westpac and the Commonwealth Bank of Australia.

Those will then be replaced by long-term debt and about $70 million to be raised half and half through a share placement and a rights issue.

The deal is subject to approval by Nuplex shareholders and by what Hirst described as an elected workers' council at the Netherlands business.

A special shareholders' meeting will be called "as soon as possible".

Nuplex says the deal transforms the company from an Australasia/Asia regional business into a global manufacturing and marketing group with sales "well in excess of $1 billion".

CR is based in Bergen op Zoom, Netherlands where it has a manufacturing and research and development facility.

It is also in the UK, US, Brazil, Malaysia, Indonesia, Thailand and The Peoples Republic of China.

The business employs 774 people of which 355 are located in the Netherlands.

The company is described as a global manufacturer of high performance resins for coatings - supplying the largest coating manufacturers.

Nuplex said the assets to be acquired would be all shares in the wholly owned coatings resins subsidiaries of Akzo Nobel, Akzo Nobel's shares in joint venture companies in Asia and the coatings resins business assets operated within some Akzo Nobel subsidiaries in the UK, US and Brazil.

After the deal, Nuplex will have $328 million of debt versus today's $187 million.

Nuplex said the benefits of the deal include:

* Access to research and development;

* Critical mass that will yield benefits internally in areas such as marketing, purchasing, operations, HR, systems and procedures.

* Established businesses in South East Asia and a new plant in China;

* Growth opportunities in Eastern Europe and South America.

Nuplex has about 8500 shareholders.