Qualceram's £54 million takeover of the British group Shires has meant that the Irish group is now negotiating the sale of its 50 per cent stake in Vitra Tiles (Ireland) to its Turkish partners.
Two years ago, Qualceram linked up with the Turkish group Eczacibasi Karo Sermaik (EKS) to form Vitra Tiles, which planned to manufacture and market floor and wall tiles for both the Irish and British markets. The joint venture is located in the former Noritake plant in Arklow and aimed to create 170 jobs over three years.
Chief executive Mr John O'Loughlin said that Vitra, which is managed by EKS, has met its performance targets, but that the Shires acquisition meant that Qualceram now had a conflict of interest with Vitra.
Qualceram's stake in Vitra Tiles is treated as a financial asset worth just over #1 million (£790,000) in the group's halfyear balance sheet. Qualceram itself, owns the Noritake plant in which Vitra operates and will continue to receive an income stream once it sells its stake to the Turkish company.
Confirmation of the planned sale was included in Qualceram's half-year results which show pretax profits up 12 per cent to #1.8 million while sales were up 33 per cent to #10.3 million.
The half-year results are largely academic given the imminent transformation of Qualceram's business with the completion of the Shires business. This acquisition means Qualceram's turnover will increase by a factor of six to £90 million. The takeover will mean Qualceram will soon have to take a decision on its poorly-performing French business.
