Low & Bonar (LON:LWB) , the performance materials group whose specialist textiles and fabrics are used in the likes of road building, artificial grass football pitches and the sides of trucks, has signed a joint venture in Saudi Arabia. The company has teamed up with National Petrochemical Industrial Company (NATPET), which is a subsidiary of Alujain Corporation. Together, the two sides plan to design, manufacture and sell geotextile products for the fast growing civil engineering markets in the Middle East and the Indian subcontinent.

The joint venture company will build a new manufacturing plant at a site near to NATPET’s polypropylene production facility in Yanbu, in western Saudi Arabia, and will benefit from a long term supply agreement with NATPET. L&B will have a 50% equity interest in and shared operational control of the venture with NATPET. Each partner is injecting approximately £5.4m into the venture during 2011, with L&B’s contribution being funded from its existing resources. The venture is expected to be earnings enhancing for L&B in 2013, in its first full year of operation. The Low & Bonar share price rose by 1.9% on the news to 54p.

Alujain is a public company in Saudi Arabia with a substantial stake held by Xenel Industries, a diversified industrial holding company based in Jeddah. Alujain leverages Saudi Arabia's significant hydrocarbon resources in developing world-scale energy intensive industries. The joint venture arrangements are subject to obtaining standard licences required to conduct business in Saudi Arabia, which are expected to be obtained by mid 2011.

Steve Good, the chief executive of L&B, said: “We are delighted to be partnering with such a well respected Saudi Arabian company. The joint venture is well positioned to take full advantage of the high growth geotextile markets in the Middle East and the Indian subcontinent given its unparalleled technological, marketing and raw material strength. The venture increases the group’s presence in fast growing emerging markets and is a further step in our development as a global performance materials group.”

Marwan Nusair, the president of Alujain, added: “The geotextiles joint venture is our first downstream venture under NATPET with a view to developing value-added products, creating employment opportunities for Saudis and bringing new technology to the Kingdom. We are proud to have joined hands with a leading player in the geotextiles business.”

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