The venture will have potential sales of around $41 million a year at today’s prices, of which Gadot Biochemical will make half.
Delek Group Ltd. (TASE: DLEKG) subsidiary Gadot Biochemical Industries Ltd. (TASE: GDBC) has signed an MOU with a Chinese partner to set up a citric acid plant in China and the marketing of the products there and in other countries. A final contract is due to be signed by the end of February.
Gadot said investment in the venture would probably total $25-30 million, of which Gadot will invest 51%, or $12-15 million.
The new factory will cover a 42.5-acre site in an chemical industrial park. Gadot believes that construction will take 12 months, and said that the new plant’s output would be 60,000 tons a year. Citric acid costs $680 per ton in China, giving the venture potential sales of around $41 million a year at today’s prices, of which Gadot will make $21 million.
Gadot added that will appoint three of the venture’s five directors.
Published by Globes [online], Israel business news - www.globes.co.il - on January 2, 2007
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