| Paper mills to invest $140m in new machinery - The investment amounts to 73% of the company's market cap
American Israeli Paper Mills Ltd. (AMEX: AIP; TASE: AIP)
will invest $140 million in new packaging machinery at the
company's Hadera factory. The machinery will use paper and
cardboard waste to produce 230,000 tons a year.
American-Israel Paper Mills has a market cap of $190 million;
the investment amounts to 73 percent of its market cap.
The company's main shareholders are IDB Holding Corp. Ltd.
(TASE:IDBH) subsidiaries Clal Industries and Investments
Ltd. (TASE: CII), with a 38 percent stake and Discount Investment
Corporation (TASE: DISI) with a 38 percent stake.
The new machinery is due to begin production in 2009. When
its begins operating and one of the factory's two current
machines is shut down, the company's paper packaging output
will increase from the current 150,000 tons a year to 330,000
tons. The new machinery is intended to meet growing domestic
demand and compete with imports in both price and quality.
American-Israel Paper Mills predicts that the large increase
in paper production on the basis of its current plant will
improve its long-term profitability.
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