Pegas Nonwovens is building a nonwovens manufacturing site in Egypt, the company's first venture outside of its native Czech Republic. The new facility will be operated by a new company, a wholly-owned subsidiary of Pegas, named Pegas Nonwovens Egypt.
"The establishment of the company is the result of successful negotiations with a major customer who expressed interest in a supply arrangements for our products to its production plants in the Middle East. We have received a preliminary award letter for long-term deliveries to these plants," said CEO Frantisek Rezac.
The plant, which will represent an investment of €55-60 million, will likely be located in an industrial zone not far from Cairo. Construction will begin once a definitive contract with the customer is closed. Beyond the existing customer, executives expect the plant will open up a number of new opportunities in the promising markets of North Africa, the Middle East and Asia.
Pegas will ultimately build two nonwovens lines in Egypt. The first will be able to make 20,000 tons of material when it is up and running in the second half of 2013. The second willhave a similar output and will come online in 2015-2016, provided market conditions are favorable.
"Egypt is an open country that welcomes foreign investment that supports employment and the country's growth. Especially in light of the recent events in our country, we want to show that developments in Egypt are proceeding in the right direction. We are glad that the investment of Pegas in Egypt will support mutual cooperation between our two countries and confirm that Egypt continues to be an interesting location for foreign investors. From my position, I can promise maximum support for this project from government officials and institutions," said the Egyptian amabassador to the Czech Republic Amal Mourad.
The Pegas Nonwovens Egyptian project will be headed by Philippe Ehret, a manager with extensive experience in the area of nonwoven textile production and project management. He most recently helped establish a nonwovens production plant in Saudi Arabia.
"Within the scope of its strategy, Pegas has long been monitoring investment opportunities, which could lead to the growth of the company and its expansion outside the Czech Republic. The aim of the company is to follow its key customers to areas of their production facilities expansion. The construction of a manufacturing facility in Egypt fits perfectly into this strategy. For Pegas, this investment also represents an historical watershed moment, which moves the company forward from its current position as a major European nonwoven textile manufacturer to that of becoming a company with a more global scope of operation and with a focus on fast growing developing markets. We see this as a significant first step on the road to further international expansion in the future," concluded Mr. Rezac.
Eastern Europe's largest nonwovens producer, Pegas Nonwovens has invested aggressively in new capacity in recent years. Its ninth production line, capable of adding 20,000 tons of capacity, is currently under construction in the Czech Republic.