| General Announcement Reference No CI-070430-F12A6 |
| Company Name | : | EVERGREEN FIBREBOARD BERHAD |
| Stock Name | : | EVERGRN |
| Date Announced | : | 30/04/2007 |
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| Type | : | Announcement |
| Subject | : | EVERGREEN FIBREBOARD BERHAD ("EFB" or the "Company") SALE AND PURCHASE AGREEMENT BETWEEN DIEFFENBACHER GMBH OF GERMANY AND EFB |
Contents :
INTRODUCTION
The Board of Directors of EFB wishes to announce that the Company had on 30 April 2007, entered into a Sale and Purchase Agreement ("SPA") with Dieffenbacher GmbH of Germany (collectively shall be referred as "THE SUPPLIER"), on behalf of Siam Fibreboard Co., Ltd ("SFC"), for the supply and commissioning on the major part of a complete turn-key medium density fibreboard ("MDF") line.
DETAILS ON THE SPA
The SPA is over RM120 million for a firm order for the supply and commissioning on the major part of a complete new plant with a designed and production capacity of 900m3 per day or 268,000m3 per year is a fully automated state-of-the-art plant, with the latest technology of world's fastest speed at over 100m per minute and one of the world's 1st Super Thin 1.5mm High Density Fibreboard of up to 1100kg/m3 (Normal high density fibreboard is 900kg/m3). It is also capable of producing normal MDF with thickness ranging from 2.5mm to 30mm. This expansion will put the EFB Group's combined MDF production capacity to 1.06 million m3 per annum.
The new plant is expected to commission in the third quarter of 2008 which is mainly for the export market.
RATIONALE
The expansion will further increase the production capacity, operational efficiency as well as broaden the product range of the EFB Group. The new line will also enable the EFB Group to produce higher value added products including E0 and Super E0 formaldehyde MDF, Moisture Resistant and Fire Retardant MDF. This product is set sight for special niche markets which the EFB Group currently has not much involvement. In essence, the expansion will augur well with the EFB Group's objective of becoming one of the most competitive and comprehensive producers of MDF products in the region.
EFFECTS OF TRANSACTION
- 1. NET ASSETS, GEARING AND EARNING
The expansion plan is not expected to have material effect on the net assets and gearing of the EFB Group for the financial year ending 31December 2007. However, it is expected to contribute significantly to the profitability of the EFB Group when it is fully commissioned.
2. SHARE CAPITAL
- The expansion plan has no effect on the issued and paid up share capital of the EFB Group.
3. SOURCE OF FUNDING
Funding of the expansion plan is by way of internal generated fund of the EFB Group and bank borrowings.
DIRECTOR'S AND SUBSTANTIAL SHAREHOLDER'S INTEREST
None of the Directors and/or substantial shareholders of the EFB Group and/or persons connected to them have any direct/indirect interest in the SPA.
APPROVALS REQUIRED
The expansion plan is not subjected to the approval of shareholders.
All necessary approvals from the Thailand Authorities have been obtained and in addition an 8 years pioneer status which exempts from corporate taxes has also been granted.