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Reichhold to Expand in Latin America and will Acquire Business of Fibercenter

01 August 2000

Reichhold officials announced today that the company has agreed to acquire the unsaturated polyester resin and gel coat business of Fibercenter Ltda., the fourth largest producer of polyesters in Brazil, strengthening Reichhold's position as the largest polyester producer in the Latin American region. Under the terms of the acquisition agreement, Reichhold will acquire Fibercenter's resin and gel coat business, but will not acquire any plant facilities or physical assets except for a short list of process equipment. Annual sales of Fibercenter are approximately $10 million (US). Fibercenter will manufacture resins for Reichhold until a plant expansion at Reichhold's Resana location near Sao Paulo, Brazil is completed early next year. Fibercenter's gel coat production will be transferred as soon as possible to the recently completed gel coat plant at the Resana site. Also included in the acquisition transaction is a long-term contract for Reichhold to become the exclusive supplier of polyester resins and gel coats to Fibercenter's expanding network of retail stores. This agreement in an excellent strategic step for both companies. With the sale of its resins and gel coats business, Fibercenter is now free to pursue its preferred strategy of growth through distribution and expansion of its store network. As exclusive supplier to the stores, Reichhold will enjoy opportunities for more rapid growth. Reichhold currently employs 327 people at its Resana site in Mogi da Cruzes, 70 km east of Sao Paulo. Reichhold is a leading manufacturer of adhesives, coating resins, polyester resins and synthetic latex emulsions for the coatings, adhesives, plastics, paper, textile, carpet, construction, transportation, marine and graphic arts markets. With manufacturing operations throughout North America, South America and Europe, the company has annual sales of $1.2 billion. Founded in 1927, Reichhold is a subsidiary of Dainippon Ink & Chemicals (Tokyo, 4631), the world's largest producer of printing inks and polyester resins.






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