The Courier & Advertiser (Perth and Perthshire Edition)
Low & Bonar grass yarns sale costs 30 Dundee jobs
MANUFACTURING: Group completes €27m sale of division to Dubai company
Dundee-founded textile manufacturer Low & Bonar (L&B) has completed the €27 million (£22.75m) sale of its artificial grass yarns business to the Mattex Group of Dubai.
The move has cost around 30 jobs at the group’s Caldrum Works in Dundee.
Prior to the sale it was the workplace for about 80 people who were engaged in the manufacture of artificial grass and carpet backing.
The loss of artificial grass leaves only carpet backing in Dundee, where about 50 staff are employed.
Carpet backing is one of Low & Bonar’s main products and there is not thought to be any threat to its manufacture continuing in the city for the foreseeable future.
In a statement confirming the grass yarns sale to Mattex, the group said the information and consultation process with affected employees has been completed.
Earlier this year L&B said the sale of grass yarns to Mattex would allow it to invest in higher margin businesses achieving better returns.
The grass yarns sale to Mattex would reduce borrowings by around €29m after costs of €1m, and provide flexibility for expansion.
Mattex does not have any manufacturing plants in the UK, so its purchase of L&B’s grass yarns business would see that operation move overseas.
Low & Bonar was founded in Dundee in 1903 and employed thousands of citizens at the height of the jute trade.
The sale to Mattex also involved the group’s Abu-Dhabi production plant as well as L&B interests in Europe, the United States and other assets from the sports and leisure business unit.
In the six months to May 31, L&B’s profit before tax, amortisation and non-recurring items from continuing operations rose by 1% to £10.6m.
Revenues rose by 2.4% to £180.6m while operating profits increased by 2.3% to £13.3m.
The growth was attributed to profits and margin progression in building and industrial, civil engineering and interior and transportation businesses.
Non-recurring costs of £200,000 were incurred for the new Colback manufacturing factory in China, where sales were initially ahead of plan.
The joint Bonar Natpet venture with Saudi Arabia’s National Petrochemical Industry made a loss, and L&B were trying to sell the venture.
L&B chairman Martin Flower said at the time: “We are starting to realise the benefits of the reorganised business structure and leadership.
“We remain confident of meeting the board’s expectations for the full year.”