Ceramco shedding China Clays unit

By DITA DE BONI

Ceramco Corporation said yesterday it had found a buyer for its recently revived China Clays division.

The clay processing and exporting company will be sold to Paris minerals concern Imerys for $41 million, subject to Overseas Investment Commission and shareholder approval.

Imerys has an annual turnover of $US2.5 billion ($4.98 billion) from the processing of minerals and the manufacture of building materials, pigments and additives for industry.

It operates mostly in France and North America, but has indicated China Clays will complement existing business.

Ceramco's China Clays began operations in 1969 and now processes about 80,000 cu m of clay annually from near Matauri Bay in Northland.

The clay is exported to 20 countries, principally to Thailand, Malaysia, the Philippines and Indonesia, for manufacture into products such as porcelain and fine china.

Ceramco - owner of Bendon - is primarily a clothing manufacturer and has long signalled its intention to exit China Clays.

The company said yesterday that consolidation in the global market meant the best growth strategy for the business was to be part of an international operation.

China Clays took a hammering during Asia's economic troubles and had only recouped a downward earnings slide in the six months to last December, where revenue rose 14.9 per cent to $7.7 million.

About $1.5 million worth of assets belonging to Microsilica New Zealand, the other minerals business in the Ceramco portfolio, had been written down in the same six-month period before the business was sold to Fletcher Building subsidiary Golden Bay Cement in January for an undisclosed sum.

Ceramco shares closed down 3c at 135c yesterday.