Hexagon Plans to Invest NOK 150 Million in Lincoln
03.06.2013 | STOCK EXCHANGE RELEASE
The North American market for large, gas-powered vehicles continues to grow rapidly. The most important market driver is the low price of natural gas resulting from developments in the North American shale gas market. Hexagon Lincoln is now close to doubling its production capacity in order to meet this growth. During the second half of 2013, Lincoln’s capacity will have doubled in relation to its capacity in 2012.
The Board of Hexagon Composites ASA has today discussed the situation and future prospects for the North American market. Against the background of these growth opportunities and Hexagon Lincoln’s market-leading position, the Board has decided in principle to invest in a further increase in capacity in Lincoln. The planned production line is expected to once again double the production capacity for CNG cylinders for the bus and truck market (Tuffshell®) compared with the second half of 2013. This corresponds to four times the capacity in 2012. The new production line is expected to be operational towards the end of 2014.
Initial calculations indicate an investment of around NOK 150 million. This investment will give Hexagon Lincoln an automated and dedicated production line aimed specifically at the production of pressure cylinders for larger vehicles.
“Because of the great market potential for pressure cylinders for larger vehicles in the USA, we wish to take the lead with essential investments so that we can meet customer needs. We wish to establish an automated and cost-effective production line, so as to achieve the greatest possible competitive effect,” says Tore J. Fjell, CEO of Hexagon Composites. “We are therefore pleased that the Board has taken this decision in principle.”
The Board of Hexagon Composites has also approved a bond issue to finance this investment and other possible investments linked to development of the high-pressure area. DNB Markets and Swedbank First Securities are appointed joint lead managers in connection with the issuance of bonds.