Avgol Nonwoven Industries Ltd. (TASE:AVGL), controlled by British private equity firm Ethemba Capital, today made a series of announcements. In addition to publishing its financial report for the second quarter of 2013, the company announced that it will build another production line in Russia, at an investment of $60 million, and that CEO Shlomo Liran, who has served in the post since 2010, will soon leave for personal reasons.
Avgol's share price fell 4.8% today to NIS 3.24, giving a market cap of NIS 1 billion.
Avgol, a producer of nonwoven fabrics for manufacturers of baby diapers, adult incontinence, and feminine hygiene products, posted $82.6 million revenue for the second quarter, 3% more than for the corresponding quarter of 2012. The low rate of growth was mainly due to slower growth in demand in China, and longer than expected approval processes by customers for products from the company's third production line in China.
Net profit rose to $3.8 million for the second quarter from $840,000 for the corresponding quarter. Financing expenses were nearly halved to $3.2 million for the second quarter from $6.3 million for the corresponding quarter. Net profit was $7.1 million in the first half.
Avgol also announced that it will build a second production for nonwoven fabrics in Russia. The new production, which will begin operating in first half of 2015, will increase the company's production capacity in Russia by 18,000 tons a year to 28,000 tons a year.
Avgol chairman Michael Teacher said today that the new production line was because of "strong growth in demand for Avgol's products in the Russian market and in the markets of the former Soviet republics, due to the increased use of hygiene products and diapers."
Avgol has begun a global search for a new CEO. Liran said, "I believe that Avgol will continue to growth and strengthen its market position. After a fascinating and challenging tenure at the company, I decided to end my term as CEO for personal reasons. However, I will continue to help the company with my knowledge and experience as requested."
Published by Globes [online], Israel business news - www.globes-online.com - on August 25, 2013
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