Listed Companies' Announcement
FEDERAL INTERNATIONAL (2000) LTD
FEDERAL INTERNATIONAL'S SUBSIDIARY, HP&T, SETS UP A COMPANY IN INDIA TO ACHIEVE C0MPETITIVE ADVANTAGE IN PROCUREMENT AND MANUFACTURE OF VALVES
March 13, 2002, Singapore -- Mainboard-listed Federal International (2000) Ltd ("Federal"), an established flowline control products distributor and service provider supporting the oil and gas and related industries in the region, today announced that its Houston-based subsidiary, HP&T Products Inc (HP&T) has set up an India-based company, GV Resources Private Ltd ("GV") to enhance its competitive position vis-a-vis global valve manufacturers.
The objective of the acquisition is to enable HP&T, in which Federal holds a controlling stake of 60%, to take advantage of the lower costs in India on engineering design on forgings and components, so as to better compete with other global valve manufacturers who are already using India for the manufacture and supply of forgings and component manufacturing.
The authorized capital of GV is Indian Rupee 1,000,000 comprising 10,000 equity shares of Rupee 100 each. The issued and paid-up capital are Rupee 200,000 comprising 2,000 ordinary shares of Rupee 100 each.
GV was incorporated under the name of George Anderson and Vijay Chatufale. HP&T holds 1995 shares. The balance of the shares are held by George Anderson, Vijay Chatufale, Koh Kian Kiong, Chew Keng Keong and Chng Geok who hold one share each in trust for HP &T.
This investment, which costs 200,000 Indian Rupees (S$8,000) is Federal's fourth investment since its IPO launch but its first investment in India. The investment is expected to bring additional revenue streams for Federal in terms of product design services, and sales of valve components of HP&T product lines and would be funded by internal resources.
Commented Mr K K Koh, Federal's Executive Chairman and CEO, "This investment, albeit small, marks our strategic move to capitalise on the Indian market to keep our manufacturing costs low and thus enhance our competitive edge. It will open up a new and growing market in West Asia's fast developing oil and gas sector and also bring us new revenue streams. This initiative is also in line with its overall business strategy to move upstream and scale up the value chain to provide higher value-added design and manufacture of specialised valves and related products."
This investment is not expected to have a material impact on the net tangible assets or earnings per share for current financial year ending December 31, 2002.
Save as disclosed above, none of the Director or substantial shareholders of Federal has any interest, direct or indirect, in the above said transaction.
HP&T is a joint venture between Federal, which holds a controlling stake of 60% and two partners. These two individual shareholders bring with them extensive industry experience and expertise in their respective fields of R&D, design, engineering and marketing.
Based in Houston, USA, the company, which has a paid-up capital of US$800,000, aims to offer customers innovative mechanical technology and responsive, specialised services focusing on the worldwide valve market. Harnessing some of the most state-of-the-art sealing technology and innovative designs, HP&T intends to initially manufacture API 6A and API 6D valves and related products for the drilling and completion markets, and later to focus on the production and refining markets.
About GV Resources Pvt Ltd
GV Resources Pvt Ltd. was incorporated in Pune, India to achieve competitive engineering design personnel and also for the procurement of API 6A and API 6D components for the oil and gas industry. The company has expanded successfully to the stage where it is now time to start its own manufacturing of the components for the HPTTM models of gate valves and actuators which will be used in some of the most extreme conditions in the industry today.
About Federal International
Federal is principally involved in the distribution of flowline control products (including valves, structural steel, steel flanges/connectors and pipe fittings) to the oil and gas, power, chemical and pharmaceutical industries. By moving upstream into the design and manufacture of specialised valves and related products, Federal aims to be an integrated service provider and procurement specialist in the energy and infrastructure industries offering a complete one-stop service package.
Issued on behalf of Federal International (2000) Ltd
By Stratagem Consultants Pte Ltd
For further information, please contact:
Ms Gwen W Ling/Tham Moon Yee
March 13, 2002
Submitted by Chng Geok, Company Secretary on 13/03/2002 to the SGX