Accsys Technologies (AIM:AXS) PLC has issued a profit warning that took the sheen off the news that it has made a final investment decision to construct and operate a new production facility in the USA.
The wood-hardening company warned full-year underlying profits would be at the lower end of market expectations as sales volumes had dropped 2% over the past 10 months due to production issues and this would not be recovered by the end of its financial year.
Accsys said demand for its treated wood product, Accoya, had remained strong and that production at its facility in the Netherlands was now back at full capacity after being temporarily shuttered to install a new reactor and conduct maintenance work.
With the final investment decision made for a 60%-owned US joint venture, Accsys said key commercial contracts have been concluded, including with partner Eastman and for US$80mln of bank financing, meaning construction is able to begin “shortly”.
Located at Eastman's Kingsport, Tennessee site, the plant will cost US$136mln to get up and running and will have an initial capacity of roughly 43,000 cubic metres per year and will replicate the existing Accoya technology at Accsys’ production facility at Arnhem.