Information  X 
Enter a valid email address

Jarlway Holdings plc (PFIT)

  Print      Mail a friend

Monday 26 March, 2007

Jarlway Holdings plc

Re Joint Venture

Jarlway Holdings plc
26 March 2007

Date:               26 March 2007

On behalf of:       Jarlway  Holdings PLC ('Jarlway' or the 'Company')

                              Jarlway Holdings PLC

                                 Joint Venture

Jarlway is pleased to announce that, following approval by the Chinese
government, it has formed a joint venture, Jarlway-Lishitong Machinery Inc. ('
Jarlway-Lishitong'), with Guangdong Lishitong Machinery Co. Ltd. ('Guangdong
Lishitong'), a predominantly state-owned Chinese manufacturer of engineering

Jarlway-Lishitong has been capitalised at RMB 5.0 million (approximately
£330,000), of which Jarlway will contribute RMB 3.5 million (approximately
£230,000) in return for a 70% interest and Guangdong Lishitong  will contribute
RMB 1.5 million (approximately £100,000) for the remaining 30% The contributions
will be made in cash and rateably in three, roughly equal installments, over the
next 12 months.

The joint venture, which has an agreed term of 15 years, has been created in
order to utilise Guangdong Lishitong's currently under-employed plant and
machinery, as well as its skilled employee base, both of which will be made
available to Jarlway-Lishitong on a priority basis.  It is expected that the
invested capital of RMB 5.0 million will provide the necessary working capital
for the joint venture's expected production for the first 12 months of
operation.  There is no obligation on either party to make further contributions
to the joint venture. The additional capacity available to Jarlway through the
joint venture is expected to increase the Company's current capacity by about

Jarlway-Lishitong intends to exploit the continuing growth of the construction
machinery market in China. The Company's Directors believe that China's current
five-year national development plan will continue to underpin state investment
in national infrastructure. In particular, the Directors believe that the
northwest region will be a key area of growth. They further believe that
international demand for Chinese construction machinery will also continue to
grow, as the quality and value offered by Chinese products becomes increasingly
recognised globally.

Jarlway-Lishitong is initially expected to manufacture line pumps as well as
hydraulically operated, truck mounted cranes. Jarlway does not currently
manufacture this latter product itself. The Directors are confident there is
significant market demand for both these products.

Mr. Wu Zhijia, the Chairman of Jarlway, commented:

'This joint venture strengthens the Company's production capacity significantly,
while not requiring a substantial capital investment, and within a faster
timeframe than if we were to build an equivalent manufacturing facility
ourselves. It will also significantly strengthen our research and development
capability and help us to continually develop and expand our product range.
Combined with Jarlway's extensive sales and after sales network, and our
reputation for quality and value, Jarlway will be well positioned to capture a
larger share of the ever-growing market for construction machinery in China.'

                                    - Ends -

For further information:

Jarlway Holdings plc
David Thomas                                                    +44 7753 457 931
Ng Chichor                                                       +86 13316269616
Nominated Adviser
Nabarro Wells & Co. Limited
Robert Lo                                                       +44 20 7710 7400

                      This information is provided by RNS
            The company news service from the London Stock Exchange