The board of directors of Avgol Nonwoven Industries Ltd. (TASE:AVGL) has approved a framework agreement between subsidiaries Avgol Ltd. and China's Hubei Gold Dragon Nonwoven Fabric Co. Ltd. and a large customer in the Far East for the supply of nonwoven fabrics. The name of the customer was not disclosed.
Avgol will supply a range of products in varying quantities over a period of several years, beginning on January 1, 2010. The agreement sets out estimates of the quantities and products that Avgol will supply. The amounts are estimates only; the customer has not committed to actually buying them.
Avgol estimates that, if the customer buys all the quantities of products set out in the agreement, Avgol's revenue from the contact could reach $105 million during the contract period. It cautioned, however, that since there is no commitment to buy the full quantities, this forecast might not materialize.
Avgol's share rose 13.1% in early trading today to NIS 2.63, giving a market cap of about NIS 750 million.
Published by Globes [online], Israel business news - www.globes-online.com - on January 11, 2010
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