(Sharecast News) - Construction materials distributor Brickability Group announced the formation of a joint venture with La Perla Participaties and Harold Kock on Friday, for the manufacture of clay roof tiles through a joint venture, Schermbecker Building Products.
The AIM-traded firm said the venture would operate from a factory in Germany, leased from tile manufacturer Nelskamp.
It said the joint venture, once fully operational, was expected to produce around 45,000 tonnes of clay roof tiles annually for distribution into the UK and European markets.
The group currently imports around 25,000 tonnes of clay roof tiles annually.
It said the production, when fully operational, would provide around 22 million additional clay roof tiles annually for the group, which would generate around £9m of incremental annualised revenue.
The production of clay roof tiles for the UK market was expected to begin in the autumn, once the necessary modifications to the factory were fully commissioned.
Brickability would hold 50% of the joint venture company, following an investment of €0.5m (£0.42m).
The company said it would provide the joint venture with a term loan of €3.5m, due for repayment at the end of June 2025, to fund working capital, the purchase of assets and new capital investment.
"This strategic partnership with Nelskamp will provide a much needed solution to the severe shortage of clay roof tiles in the UK, in doing so further strengthening the group's position in the market and further demonstrating both Brickability's expertise in procurement and the long and strong relationships we enjoy with our partners," said chief executive officer Alan Simpson.
At 1530 GMT, shares in Brickability Group were down 1.35% at 89.28p.
Brickability Group (BRCK)