Low & Bonar eyes overseas expansion

LOW & Bonar, the international yarns and fibres business that includes a plant in Dundee, yesterday revealed its ambitions to “scale up” in Asia and Latin America after posting a surge in annual profits.

Chief executive Steve Good said L&B had largely passed on big commodity price rises in 2011 to customers, as group pre-tax profits leapt 129 per cent to £23.4 million from £10.2m.

Shareholders get a 31 per cent dividend hike to 2.1p from 1.6p in 2010.

Good said: “We have no control over the raw materials environment. But we managed to pass on virtually all of our raw material price increases last year to customers.”

L&B products go into a wide array of end uses, including artificial grass for US football stadia, flooring and erosion control systems for infrastructure projects.

“Continuous efficiencies”, the chief executive added, could boost profit margins from about 8 per cent to 10 per cent within three years. The group’s main markets include Europe and the US, but Good added: “We have the ambition and ability to be a global player, and I believe we are sub-scale in Asia.” Latin America is also being targeted.

Good said L&B was benefiting from two years of restructuring that saw the closure of its loss-making yarns sites in Belgium. Late last year, a new IT system was put into Dundee, which employs 120 compared with 170 before the restructuring.