S.Africa glass maker Consol lifts revenue, to expand

South African glass firm Consol increased revenue for the five months to end-November by 10.9 percent and said on Monday it will spend almost 500 million rand to increase capacity by 25 percent.

Consol said in a trading update that it expected business prospects to remain positive.Chief Executive Officer Mike Arnold said Consol planned to increase its manufacturing capacity by 25 percent at a total cost of 495 million rand over the next 18 months."Our current stock levels are being eroded. Peak 2006 demand will exceed supply unless we put capacity on the ground," Arnold said during a media presentation.

The expansion, which will increase capacity by 150,000 tonnes, will take place at two manufacturing plants in Johannesburg and Cape Town and will be funded out of the group's existing cash resources, Arnold said.

The group said earlier on Monday that volumes produced rose by 12.3 percent, adding that despite slightly lower revenue growth, its operating profit margins remained in line with the previous year.

It said the group's glass division showed good growth in all major categories and posted revenue growth of 13.4 percent in the five months under review.

But revenue at its smaller plastics division fell 7.9 percent, the group said.

"In general this segment continued to be affected by the strong rand, increased cost of raw materials partially recovered from the market and lower volumes due to imports and increased local competitor activity," Consol said.

The group is due to release its results for the six months to end-December on March 13 next year.

Consol shares were 1.72 percent down at 19.83 rand by 1122 GMT, underperforming the JSE Securities Exchange's Mid-cap index which was 0.86 percent higher.

600450 S.Africa glass maker Consol lifts revenue, to expand glassonweb.com
Date: 13 December 2005
Source: Reuters.com

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