# Essentra Joint Venture in China to produce specialist and next generation filters

- Link: https://www.directorstalkinterviews.com/essentra-joint-venture-in-china-to-produce-specialist-and-next-generation-filters/412799161
- Published: 2019-11-27T07:33:51+00:00
- Author: Giles Arbor

**Essentra plc** (LON: ESNT) today announced it has signed an agreement for the 
establishment of a new joint venture company in China, China Tobacco Essentra (Xiamen)
Filters Co., Ltd.

Shareholders in the JV will be Essentra Pte Ltd (which will own a 49% shareholding),
China Tobacco Fujian Industrial Co., Ltd (which will own a 21% shareholding), Shanghai
Haiyan Investment Management Co., Ltd (which will own a 10% shareholding), China
Tobacco Hunan Investment Management Co., Ltd (which will own a 10% shareholding)
and China Tobacco Guangxi Tiancheng Management Co., Ltd (which will own a 10% shareholding).

The JV shall produce specialist and next generation filters, which the JV plans 
to manufacture locally in a new facility in Xiamen, and will incorporate a state-
of-the-art development and testing centre.

The associated equity investment for this opportunity in aggregate is c.£16m (Essentra’s
share of which will be in line with our respective shareholding in the JV). Establishment
of the JV is subject to formal approval from the relevant regulatory authorities
in accordance with the Tobacco Monopoly Law of the People’s Republic of China and
completion of various ancillary documents. Essentra and China Tobacco Fujian will
cooperate closely to obtain the necessary regulatory approvals as soon as possible.
It is anticipated that the JV will commence construction and fit out of the new 
plant and machinery in Q1 2020. We expect the JV to ship first production volumes
to local customers in November 2020, at the earliest.

This transaction delivers another key strategic ‘game changer’ for the Filters division,
and closely follows the recent announcement of a significant outsourcing deal. This
alliance will open up Essentra’s access so that it can further tap into the market
in China.

> **Commenting on today’s announcement, Paul Forman, Essentra plc Chief Executive
> said:**
> “I am very pleased to secure this particular strategic ‘game changer’ for Filters.
> The JV’s onshore development and testing facility, together with local production,
> will enable us to work ever more closely with our partners in China to provide
> innovative special filter solutions”.

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