Zotefoams ploc (LON:ZTF), a world leader in supercritical foams, has announced its plans to expand its international footprint through the establishment of new, purpose-built manufacturing and innovation facilities in Vietnam and South Korea, respectively.
Over the past nine years, the Group has built a significant position in the athletic footwear market, underpinned by a strong partnership with Nike, who uses Zotefoams’ supercritical fluid foams in a number of its premium shoe programmes. This partnership has resulted in annual footwear revenues growing to over £65m in 2024, representing the largest market for the Group.
The longer-term potential for growth in footwear is substantial and the Board believes that to capitalise on this opportunity fully, the Group requires additional dedicated manufacturing and innovation capability located close to customers’ supply chains. Being able to manufacture locally, in addition to existing production in the UK, brings a number of clear benefits to the Group including strengthened customer relationships, lower production and transport costs, and significantly improved sustainability metrics. Innovation within the Group’s own manufacturing technology will enable this additional capacity to be delivered through a process which offers improved flexibility when compared to existing facilities.
Alongside the investment in additional manufacturing capability, the Group is establishing a small purpose-built footwear innovation centre in Busan, South Korea. This leased facility will not only provide a platform to showcase Zotefoams’ unique technology within the region’s R&D hub but will enable a more rapid and responsive product development capability in a fast-moving industry.
The total cost of the new manufacturing and innovation facilities is expected to be approximately £26 million and generate a strong return on investment, alongside the strategic benefits. This investment is to be made over the next three financial years and will be funded entirely from existing facilities and within the Group’s target leverage levels. A leased facility close to Ho Chi Min City, Vietnam, will be selected shortly and the fitting out will begin in Q2 2025, with commissioning expected in 2027.
Evolving the Group’s operational footprint represents a key pillar in delivering its long-term growth strategy, which includes adapting the Group’s technology to produce precision 3D parts that will reduce production waste and improve cost efficiency and value for customers. This investment aligns with the Group’s strategic focus on getting closer to customers, delivering more sustainable and innovative solutions, and substantially enlarging our addressable market within the athletic footwear sector and beyond.
The Group looks forward to providing more detail on this at the forthcoming Capital Markets Day on 18 March 2025.
Ronan Cox, Zotefoams plc CEO said: “This investment in Asia marks a pivotal moment for Zotefoams, positioning us at the heart of the global athletic footwear ecosystem. By establishing manufacturing in Vietnam and innovation capability in South Korea, we are transforming our ability to serve this market with greater speed and innovation. Our new 3D parts manufacturing will significantly reduce production waste, while our proximity to key hubs will accelerate development cycles. Our strong partnership with Nike provides the foundation for growth across its running portfolio and into additional footwear categories. This expansion reflects our confidence in the substantial growth potential of our footwear business and our commitment to maintaining our technology leadership in order to deliver attractive returns for our shareholders.”
