Insider Media Limited

Supply chain services business Umeco has entered into a joint venture with its Chinese distributor Shanghai Leadgo Technology, subject to approval from the Chinese authorities. The joint venture company, which will be named Shanghai Umeco Composites, will be 51 per cent owned by Leamington Spa-based Umeco.

Leadgo will take a 49 per cent stake in the new company. Approaval for the venture is expected to be given within the next two months.

Under the new venture, a facility will be established in Shanghai to manufacture vacuum bagging films for the rapidly-growing Chinese wind energy market. The new facility should be fully operational by the end of 2011.

Umeco currently manufactures the films supplied to Leadgo for the Chinese market at its facility in Italy.

Umeco estimates its total investment in the joint venture will be approximately $4.1m. This comprises a cash investment of $2.4m for its equity stake in the company and a $1.7m shareholder loan facility.

Leadgo said it “will also make a similar investment and provide a similar loan”.

Clive Snowdon, chief executive officer of Umeco, said: "The continued growth of the global wind energy market, despite the economic downturn, reflects the ongoing transition to generating power from renewable sources. This joint venture represents another important step in building Umeco's capability in the world's largest wind energy market."