Trading Update

24 Sep 2007 07:00

HydroDec Group plc24 September 2007 24th September 2007 HYDRODEC GROUP PLC HYDRODEC SECURES SECOND USA PRODUCTION SITE Hydrodec Group plc ("Hydrodec", AIM: HYR) is pleased to announce that it hasreceived approval, from Jones County Authorities, to proceed with procurement oflong-term lease possession of a 12.9 acre property in Laurel Mississippi.Approval to proceed includes in-principle approval to establish the Company'ssecond USA production facility on this site, which will accommodate the currentplanned capacity of 90,000 litres of Superfine oil per day with significant roomfor expansion in the future. Total capital expenditure is expected to be US$15million, which is 15% below the original budget. The site is strategically located in close proximity to Howard IndustriesDistribution's transformer manufacturing facility. Howard Industries is aleading manufacturer of oil filled transformers and one of the larger consumersof mineral transformer oils in the USA. The plant is planned to commenceconstruction in H1 2008, with commissioning in H1 2009. Chairman John Gunn commented "The Company's marketing program is generating verystrong interest within the USA and consequently we are planning to accelerateestablishment of a second production facility that will in effect doublepreviously announced USA production capacity. The decision to acceleratecapacity ramp up is further underpinned by progress on construction in CantonOhio. In Canton, procurement of critical long lead equipment and siteconstruction contracts is well advanced and now strongly indicates completionand start up on schedule and ahead of budget. Marketing activities in the USA are leveraging off market progress in Australia.Our recent half year results showed ramping up of oil sales after a slow startto the year in Australia. Increased sales have been achieved with broadeningrecognition of the outstanding technical qualities of the product and throughselective pricing to key bulk purchase customers. The Company is now ideally positioned for rapid establishment in the US market.The capacity and momentum generated by the US start up will create a criticalmass of capacity sufficient to support future expansion in the US and otherinternational markets." For further information please contact: John Gunn, ChairmanHydrodec Group plcTel: 0207 236 6236 Emma DavisCurve PRTel: 07764 197 003 Nick WestlakeNumis SecuritiesTel: 0207 260 1000 This information is provided by RNS The company news service from the London Stock Exchange