Ceramco to sell clays business

WELLINGTON - Ceramco will seek shareholder approval next month to sell New Zealand China Clays to Mircal, a subsidiary of French industrial mineral company Imerys, for $41 million.

Ceramco chairman Ian Parton said the offer exceeded the fair value range established for the china clays business established independently by Deloitte Corporate Finance.

If shareholders endorse the sale on June 1, Ceramco would also seek approval to cancel one in four of its shares and return $16.1 million in capital to shareholders.

The move is part of Ceramco's strategy to quit the china clays business and build its Bendon subsidiary.

"Bendon dominates the New Zealand market and we're moving to that position in Australia," Mr Parton said.

"Our strategy is to expand markets in Australia and move into Europe.

"We will further increase market access through the development of e-commerce opportunities."

Expansion would take place over the next three years, he said.

Bendon was forecasting operating earnings before interest and tax (Ebit) of $6.2 million for the year ended March 2000, with projected operating Ebit reaching $7.9 million in 2001, before costs associated with expansion.

"Globalisation of clay and minerals markets has created large, international companies which can dominate our markets," Mr Parton said.

"As a small niche player, we are finding it more difficult to compete. We are vulnerable on price, and facea steady slide towards marginalisation."-NZPA