LONDON (Thomson Financial) - Industrial chain maker Renold PLC said it has paid 4 mln usd for a 90 pct stake in the chains manufacturing business of Chinese firm HangZhou ShanShui (HZSS). Renold said the acquisition will significantly increase its available manufacturing capacity and will remove the need for 8 mln usd of budgeted capital spending for this year. HZSS operates from a large production plant in Zhejiang province and has annual turnover of about 9 mln usd and more than 400 staff, who will represent about 30 pct of Renold's worldwide employees directly involved in chain-making. Renold said the acquisition, expected to complete in June, will significantly increase its manufacturing in low cost countries. It is part of a drive by the company to increase staff numbers in such countries to more than 40 pct of the group total by the end of 2008/9. The business will be called Renold Hangzhou and is expected to increase group sales and be earnings enhancing after 12 months. "The outlook for the sectors that it serves remains broadly positive with particular opportunities in its domestic markets," the group said in a statement. philip.waller@thomson.com paw/jlw COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.
