InterviewGRI Group plans new capacity, acquisition in 2011

01 February 2011 15:09  [Source: ICIS news]

By Will Beacham

LONDON (ICIS)--UK-headquartered surfactants company GRI Group is embarking on an ambitious growth plan, adding new manufacturing capacity and making an acquisition this year, its chairman and CEO told ICIS on Tuesday.

New capacity to expand its range of surfactants and other products will be added at the company’s sites in Liege, Belgium and Manchester, UK, and the company expects to close an acquisition in Europe, according to Graham Royle.

Royle said he expects operating revenues to increase organically from around $150m (€110m) in 2010 to around $200m within three years as the company boosts its portfolio through the new capacity expansions.

He is also on the acquisition trail and hopes to close a deal by the end of the first half of 2011. “We want to add chemistries to our portfolio for our customers in personal care, household care and industrial applications. We are in the early discussion stage with two possible candidates.”

The deal, he said, is likely to be bolt-on rather than transformational.

Royle added: “We will gain strength from being larger and having a more commanding position in the market. If we can offer a wider range of products then we can be a better long-term supplier and partner.”

GRI is going to raise money for acquisitions through its own cash flow and banks rather than involving private equity:  “I have a long-term strategy whereas private equity is looking for a three year turnaround and exit.”

Further ahead there could be scope for a series of acquisitions, said Royle: “We have really excellent funding streams and we’re looking for acquisitions - come and knock on my door!”

The current capacity of the Belgium plant is 130,000 tonnes/year, whilst the Manchester plant is 50,000 tonnes/year of surfactants and other specialty products.

Key customers include US-headquartered groups Procter & Gamble, Johnson & Johnson and the UK’s GSK.

The group does around 85% of its business in Europe, but also trades in 60 countries across Asia, North and South America and the Middle East.

GRI acquired its Manchester site – Libra Chemicals – in December 2010. In March 2010 it sold a 75% stake in formulator and packaging group Hallam Beauty. It retains a 25% stake.

($1 = €0.73)

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By: Will Beacham
+44 20 8652 3214



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