Supreme Industries enters into Toll Manufacturing Agreement with Kloeckner Pentaplast

Supreme Industries Ltd has announced that the Board of Directors of the Company at its meeting held on April 05, 2007, has approved the following:

"We have for quite some time been considering to place more focus on investments only in product segments where our Brand Equity & leadership is established and ultimately exit from the product segments where we are neither a market leader nor a differentiator.

As a step in that direction, the Company has, subject to all required approvals if any, entered into a Toll Manufacturing Agreement with M/s. Kloeckner Pentaplast of Germany, the erstwhile collaborators of Klockner Supreme Pentaplast Ltd., which had merged with the Company. Under this Agreement, the Company will, inter alia continue to operate the existing manufacturing facilities of Rigid PVC Film and PVDC Film, for Kloeckner Pentaplast India with effect from May 01, 2007, till the eventual proposed sale of plant and machinery. Incidental to the Toll Manufacturing Agreement, the inventories will also be purchased at actuals by Kloeckner Pentaplast India, which will be utilized for manufacture of Products under the Toll Manufacturing Agreement. The land and building will however continue with the Company for future expansion activities.

The company has sold substantial assets of Daman plant manufacturing Food Service Ware products. The negotiations for the balance assets are continuing with prospective buyers. The Company has notified all the customers of its intention to close this business by June 30, 2007.

Both these products together had contributed a turnover of Rs 87.43 crores during the financial year 2005-06 and were not contributing to the profits of the Company."

Source : Equity Bulls

Keywords