Performance textiles group Low & Bonar moved to give assurances over its Dundee plant yesterday after revealing plans for a new multi-million-pound factory in China.
The firm said the decision to build the new facility was as a result of increasing demand for its products in Asia.
The new factory, which will be built over the next two years at a cost of £26m, will produce the group’s unique Colback textile which is primarily used in carpet backings.
Similar products are made at the company’s long-standing manufacturing plant at Caldrum Works in Dundee, but a spokesperson for L&B confirmed there would be no effect on the local plant as a result of the Chinese investment.
She said the two factories were working with a “different technology base” and would ultimately sell in to “different end markets”.
The new works is to be built on an established industrial park at Changzhou on the Yangtze river delta near Shanghai.
Once operational the facility will produce the Colback range of products, which have applications in the automotive industry and are used by various manufacturers as components of high-performance flooring systems.
Company chief executive Steve Good said the new factory, which is expected to begin production in 2016 and will be supported by a new Shanghai-based operation, would help Low & Bonar prosper in new and emerging markets.
He said: “Our decision to invest in a new factory in China to support the fast-growing Asian markets is consistent with the group’s strategy and will consolidate our position as a global leader in the carpet tile backing and automotive markets.
“The investment is an exciting opportunity to capitalise on our unique technology throughout Asia and to follow, and support, our strategic US customers moving into the region.
“The new factory will provide a strong platform for further growth.”
The Asia push comes just two months after the company which employs more than 2,000 people across its various operations revealed a trebling of pre-tax profits to £17.8m in the year to November 30 despite an overall 2.1% reduction in turnover to £380.5m.
It also comes as the search continues for a successor to Mr Good, who is stepping down after more than a decade on the company’s board and five years as CEO.
Shares in the company had edged down 0.90% or 0.75p to 82.50p by the end of yesterday’s trading session.