BP International, Inc. Acquires Mexican Fabric and Material Knitting Plant; Deal Expands International Presence
DELAND, Fla.--June 29, 2004--| Deal Expands BPI's National and International Presence in the Outdoor Fabric and Fabric Architecture Industry |
BP International, Inc. (OTCBB:BPIL), a leading manufacturer of fabric architecture shelters and pavilions and tennis and athletic field equipment, announced today that it has completed the acquisition of Telas Olefinas, a Mexico corporation that operates a knitting plant for outdoor fabrics.
"This acquisition opens all kinds of doors for us into new markets, increases profit margins for products we already manufacture, and demonstrates our long term commitment as a major presence in the two industries most dependent on high-tech fabrics: windscreen and fabric architecture shelters and pavilions," said Larry Ball, Chairman and Chief Executive Officer of BP International, Inc. "It perfectly compliments our existing core business while drastically expanding our ability to grow our business worldwide."
Primary strategic advantages the Mexico facility brings to BPI:
-- Provides the tooling and equipment necessary to fabricate the raw fabrics instead of purchasing them from other fabricators. This will increase the profit margin on sales of existing products an estimated 25 percent by reducing the cost of goods for windscreen, privacy fence screen, and ShadeZone(R) fabric shelters.
-- Enables BPI to offer more attractive pricing for existing products even as the bottom line grows, giving BPI an increasingly competitive pricing edge.
-- By producing fabric from its pure raw form, instead of purchasing fabrics pre-made for broad spectrum uses, BPI engineers will be able to produce fabric products precisely suited to unique client needs and specifications.
-- Combines the Mexico facility's unique fabrication talents with BPI's proven manufacturing and marketing strengths to enhance existing business worldwide and open doors to huge new markets. Introducing completely new fabric products to address specific markets will create additional wholesale and retail fabric sales opportunities with the potential of millions of dollars in new revenue.
-- Provides an entrance into the Mexican and South American markets.
-- Reduces time and expense as large, time-consuming, bulky orders are processed more efficiently and economically.
-- The property, i.e., real estate, brings added equity value to the company and its investors.
"Wolf D.H. Koch, Telas Olefinas plant director and part owner, is one of the premier knitters in the world," added Larry Ball. "Anticipating this merger, we have been working with him for the last year to develop a fabric that would meet the stringent requirements of the paint ball industry. That product is now ready for production. We have already met with the major suppliers in that industry, and they are anxiously awaiting this product, which is unlike anything currently available.
"I'm very optimistic that in the next year we could potentially do as much as half a million in sales with this one new product. And that's just one example of several completely new fabrics, targeted to existing needs and requested by major industry suppliers that are currently in development at Telas Olefinas.
"In addition," Ball concluded, "with this obvious foothold in Mexico, we are in the process of hiring sales reps to introduce our ShadeZone(R) fabric architecture shelters and pavilions to that country. We've had a number of inquiries from Mexican playground builders and developers. Now we are going to be able to supply that huge market. I consider it a stepping stone to the South American market, where the concept of fabric shelters for shade is just beginning to catch on."
Acquisition Specifics:
On May 3, 20041, 2004, BP International, Inc. completed the acquisition of 80% of the stock of Telas Olefinas, an affiliated Mexico corporation that operates a fabric knitting plant located in Mexico at Carretera Estatal Tehuixta-Jojutla De Juarez, No. 3, Morelos C.P.62915. The plant is a 25,000 square foot facility constructed of concrete block with a metal roof. The plant is managed by BP International director Wolf D.H. Koch, and has 10 employees. Construction began in the summer of 2001 and operations began in May of 2004. BP International intends to continue plant operations.
In exchange for 80% of the Telas Olefinas stock, BP International forgave $1,041,552 of loans totaling $1,301,941 that BP International made to Telas Olefinas. Telas Olefinas remains indebted to BP International for the amount of $260,388. The principle for determining the purchase value of Telas Olefinas was as follows: the $1,301,941 in loans made by BP International to Telas Olefinas were loans for the construction of Telas Olefinas' physical plant in Mexico and accurately reflects the total construction cost of Telas Olefinas' operations. The directors of both companies determined that such construction costs represented the fair value of Telas Olefinas.
Telas Olefinas is an affiliate of BP International. Telas Olefinas directors and officers are Larry Ball, Emmett Ball, and Wolf D.H. Koch, who also serve as directors of BP International. Furthermore, Wolf D.H. Koch is a 20% owner of Telas Olefinas.
Forward-Looking Statements:
Statements made in this news release that relate to future plans, events or performances are forward-looking statements. Any statement containing words such as "believes," "anticipates," "plans," or "expects" and other statements which are not historical facts contained in this release are forward-looking, and these statements involve risks and uncertainties and are based on current expectations. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements. Reference is made to the Company's filings with the Securities and Exchange Commission for a more complete discussion of such risks and uncertainties.
About BP International, Inc.:
BP International, Inc. is a leading manufacturer of tennis court equipment, athletic field and gymnasium equipment, custom netting, and outdoor fabrics for use in privacy and construction fencing and fabric architecture shade structures and cabanas. Customers include Arena Football, Montreal Expos, Boston Red Sox, Houston Astros, New England Patriots, and many colleges, universities and sports complexes throughout the United States.