Jarlway Holdings plc ('the Company'), the holding company for Jarlway Machinery
Inc. ('Jarlway'), one of China's largest concrete pump manufacturers, announced
today that the Company has published its Admission document and submitted its
application for the Admission of its ordinary shares to trading on the AIM
Market of the London Stock Exchange plc ('AIM'). Jarlway's ordinary shares are
expected to commence trading upon Admission on 18 July 2005. Jarlway's ticker
will be 'JWY'.
4,166,667 new Ordinary Shares are being issued in the Placing at the Placing
Price of 30p per share. Prior to the Placing, Jarlway's total issued ordinary
share capital comprised 20,000,000 shares. A further 246,667 new Ordinary Shares
are being issued as part settlement of adviser fees and commissions. The Placing
Shares represent 17.1% of the enlarged share capital. The Placing, which is not
being underwritten or guaranteed, is conditional, amongst other things, on
Admission. On Admission, the Company will have 24,413,333 ordinary shares in
issue and a market capitalisation at the Placing Price of £7.3 million. The
existing shareholders in Jarlway are not selling any shares in the Placing.
Nabarro Wells & Co. Ltd. is acting as Nominated Adviser and Hichens, Harrison &
Co. Plc is the Company's broker and placing agent. Zimmerman Adams International
Ltd acted as financial adviser and placing agent.
The definitions of the terms used in this announcement are included in the
Admission document, which was published today and is available at the offices of
Nabarro Wells & Co Limited, Saddlers House, Gutter Lane, Cheapside, London, EC2V
Rationale for the IPO
Commenting on the Placing, Mr Wu Zhi Jia, Chairman said: 'Jarlway is one of the
first industrial companies from China to float on AIM. This is a very important
time in our development and our admission to trading on AIM will facilitate our
ability to respond to the growing demand in the construction industry in China
Jarlway intends to capture a larger market share in the concrete pump machinery
market in China by providing products of high quality and reliability that
satisfy the varying needs of its different customer groups. Emphasis will be
placed on the enhancement of existing products as well as the launching of new
products, especially line pumps and boom pumps. Leveraging on the 'Jarlway'
brand name it has built up in the domestic market and on the provision of both a
pre-sale and after sales service through its distribution network, the Directors
believe that Jarlway has the competitive strength to become one of the leading
players in the market within China.
The net placing proceeds will be used to further develop the business and assets
of the Company and to provide additional working capital.
For further information, please contact:
Jarlway Holdings plc Shared Value Limited
KM Wong Alex Dee / Nicolas Duperrier
Tel: +852 9094 5465 Investor & Media relations Tel. +44 (0) 20 7321 5010
Nabarro Wells & Co. Limited
Tel: +44 (0) 20 7710 7400
NOTES TO EDITORS
Jarlway assembles concrete pumping systems, which are generally used in large
scale construction projects, under processes that have been certificated to
standards similar to ISO9001. Each pump system comprises a feeder skip, electric
control system, hydraulic system, motor, valves and piping and all pumps are
fitted with Jarlway's patented programmable logic controller. The product line
has historically consisted of two series of concrete pumps that are respectively
electrically and diesel powered and which are available in a variety of
different models to suit differing customer requirements.
Jarlway's current range of pumps variously have a maximum feeding volume of
between 60 and 140 cubic metres of concrete per hour, are capable of achieving
maximum vertical feeds of between 270 and 350 metres and a horizontal feeding
distance of between 1,300 and 1,600 metres.
Line pumps have great mobility advantages over trailer pumps because they are
already truck mounted and thus transportation costs are reduced. No heavy
lifting equipment is needed to load the pump onto a lorry, nor does the 8
kilometre per hour road speed limit applicable to trailer pumps apply. The time
required to relocate a line pump to different locations is significantly less
than that required for a trailer pump, making the line pump particularly
suitable for customers who need frequent pumping of concrete at different sites.
Ready mixed concrete suppliers (concrete mixing plants) and concrete machine
leasing companies are typical examples of such customers.
In addition to the features of the line pump, boom pumps also possess a 'boom',
or pre-installed ducting. This reduces time and related costs in connecting and
disconnecting ducting before and after concrete pumping and is most suitable for
use at sites whose environment inhibits the connecting of ducting such as urban
roads with busy traffic, sewage and drainage systems, pedestrian footbridges and
tunnels. The boom pump has a pumping rate of up to 140 to 180 cubic metres of
concrete an hour. The Directors believe that the boom pump is capable of
performing the same amount of work done by five trailer pumps.
The Directors believe that Jarlway products are developing a reputation for
reliability and believe that this is attributable to the substantial use of
components sourced from international suppliers such as Schneider of France,
Mitsubishi and Panasonic of Japan, Rexroth of Germany, Galtech of Italy and Esso
of the US. In addition, Jarlway PRC's patented programmable logic controller
(which controls lubrication, ensuring that concrete is not degraded by grease
contamination) increases the reliability of Jarlway PRC's products. This is
critical to minimise potentially costly delays in construction projects. In
2004, Jarlway PRC was awarded a 'Zero Defect' user title by Rexroth.
Jarlway's products have been widely used in construction projects in China. In
Shanghai, nine trailer pumps from Jarlway were used in the construction of the
31 kilometre Donghai Bridge. Jarlway pumps were also used for the sealing of the
top floor of the super-structure for the Ganghui Plaza, at 230 metres high the
tallest twin towers in China.
Jarlway's products benefit from patented design and technology, and are sold and
serviced through Jarlway's 27 sales offices around China.
Market Potential and Positioning
The Chinese economy has been experiencing significant growth over several years
with an average GDP growth of 8.1 per cent per annum during the period January
1998 through December 2004. The Directors believe that large scale
infrastructure and urban development projects such as the Three Gorges Project
(the damming of the Yangtse river), new inter provincial highways and massive
infrastructure developments in major cities have partially contributed to this
economic growth. The Directors expect China's economic growth to continue to be
fuelled over the medium term by large scale development projects including those
for the 2008 Beijing Olympic Games, the 2010 Guangzhou Asian Games and the 2010
Shanghai World Expo. The PRC Minister of Construction, Mr. Wang Guangtao, has
been reported as stating that the total gross floor area in the PRC is expected
to increase from 40 billion square metres in 2005 to 70 billion square metres by
2020. The Directors believe these projects will lead to increasing consumption
of concrete and use of concrete machinery.
The Chinese Government has adopted a number of policies and directives to
regulate the concrete industry and in 2002 published the ''Tenth Five-Year
Development Plan for the Cement Industry'' (the ''Plan''), which included an
initiative to ban on-site concrete mixing from 2006 onwards, having already been
banned in 162 major cities from 2004. The Directors believe this should increase
the production volume of ready-mix concrete with the Plan targeting a usage of
300 million cubic metres by the end of 2005 compared to the circa 200 million
produced in 2003. Delivery of ready-mixed concrete to site will necessitate the
use of concrete pumps in order to lay the concrete before solidification.
There are believed to be in excess of 200 concrete pump machinery manufacturers
in China with the market dominated by two publicly traded enterprises, Sany
Heavy Industry Limited Company and Changsha Zoomlion Heavy Industry & Science
Co., Ltd. who between them are believed to comprise some 30 per cent of the
concrete pump machinery market. The Directors believe Jarlway has, in the three
year period since its incorporation, built up a market share of approximately 8
per cent in the domestic market, driven by its reputation for product
reliability, its competitive pricing policy and provision of a dedicated
pre-sales consultation and after-sales service.
During its first three years of operation, Jarlway concentrated on penetrating
the market and brand building. The Directors believe that the ''Jarlway'' brand
is now well received and recognized and they estimate Jarlway to be one of the
largest concrete pump manufacturers in China in terms of number of machines
sold. In 2004, Jarlway generated £6.35 million in turnover and an operating
profit before interest and tax of £1.53 million.
In the coming three years, the Company's target is to become the second largest
player in the domestic market and to widen its customer base by supplying into
Jarlway intends to launch a greater variety of products to cater for the
different demands of the market. The Directors believe that demand for line
pumps and boom pumps in China will grow and the Company intends to assign more
resources to the further development and marketing of Jarlway's line pumps and
boom pumps over the next three years. Jarlway will also concentrate on enhancing
the quality and functionality of its first generation products. Its next
generation of trailer pumps is expected to achieve a continuous operational life
of pumping 50,000 cubic metres of concrete before major repair or replacement is
required. Jarlway will also continue to emphasize the quality of its services,
both in terms of pre-sale consultation and after sales service, and to further
strengthen its distribution network in the domestic market. The Directors
believe this strategy will give Jarlway the competitiveness necessary to supply
into overseas markets and become one of the leading players in the local market.
Jarlway Machinery Inc. ('Jarlway') is one of the largest concrete pump
manufacturers in the People's Republic of China. Jarlway is engaged in the
development and sale of large-scale construction machinery including trailer
concrete pumps, truck mounted concrete line pumps and concrete boom pumps and
concrete mixing stations. Jarlway utilizes patented and reliable technology
supported by a network of 27 regional sales and service stations throughout most
of China. Jarlway's products are assembled under processes that have been
certificated to standards similar to ISO9001.
More information about Jarlway Holdings plc and its products can be found on
line at www.jarlway.com