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Hexagon Composites considering options for Hexagon Devold business

By: Michael Lauzon

August 26, 2013

Norwegian composites producer Hexagon Composites ASA is looking at options for its Hexagon Devold AS business, including its sale.

Hexagon Devold, based in Langevag, Norway, is Hexagon Composites' composites reinforcements subsidiary. It runs a composites reinforcements plant in Shelby, N.C., that mainly makes products used in wind turbines. The Shelby operation is included in Hexagon Composites' search for strategic options for the Devold unit, confirmed Hexagon Composites spokeswoman Solveig Saether in an email correspondence.

Hexagon Composites' other U.S. business is based in Lincoln, Neb., where it makes liquefied petroleum gas cylinders and high-pressure cylinders, the other two business areas for Hexagon Composites. These are not part of the search for strategic options. The Lincoln business, in contrast, is being expanded at a cost of Norwegian Kroner 150 million ($24.9 million). The expansion by the end of 2013 should double production capacity to make products such as the Titan and Tuffshell composite cylinders and tanks.

Hexagon Composites said rising output of shale-derived natural gas in the United States is boosting usage of compressed natural gas in buses and other vehicles, lifting demand for pressure-resistant vessels to hold the fuel. One customer placed a new order worth about US$9 million for products made in Lincoln.

The reinforced composites sector in which Hexagon Devold participates faces structural changes and consolidation, the company explained in an Aug. 22 news release.

"We see significant economies of scale in the industry, and as part of a consolidated structure we will be in a position to achieve further profitable growth," stated Hexagon Composites managing director Kåre Dybvik.

Hexagon Composites' businesses use reinforced carbon fiber and glass fiber in its products, according to Saether. The company, based in Åeslund, Norway, trades on the Oslo exchange. For the first six months of 2013, Hexagon Composites' sales grew 30 percent to NOK 713.8 million ($118.5 million). Operating profit before EBITDA was NOK 123 million ($20.4 million), up 86 percent.