Stock market cash to finance modified wood expansion

Two UK players in the modified wood market are planning stock market flotations this month to finance major expansions plans.

Southampton-based Kurawood, which hopes to raise £4.5-5m by issuing 17 million shares at 100 pence on AIM, believes the move will help it capitalise on what it believes is a “huge market” for modified wood, softwood treated to give it the characteristics of hardwood.

London-based Accsys Technologies intends to offer five million new shares and 10 million exsiting shares on Euronext Amsterdam to double the manufacturing output of its Arnhem plant where the modified wood brand Accoya is produced.

The new finance will allow Kurawood to purchase PG Industries - which owns the the rights to the VECO process that uses organic compounds to strengthen the timber and designed to give radiata pine the characteristics of hardwood - as well as the manufacturing plant in New Zealand.

Money raised will also allow Kura production to be raised from the current 5,000m³ to 50,000m³, with remanufacturers in South-east Asia then using the material to produce a range of products, including skirtings, architraves, doors, windows, worktops, kitchen cabinetry and garden furniture before export to the UK.

“I have been in the DIY and building industry since 1982 and I have never known it so easy to get in to see buyers,” said Kurawood managing director Kevin Fraser.

He said the company was in discussion with Argos, Homebase, B&Q and Wolseley about stocking Kurawood products.

Kurawood says its material can be engineered to the hardness required, even to the level of wood lignum vitae, though the normal hardness produced is just above oak.

Accsys also plans to use the new cash on brand and product marketing, including promoting Accoya as a material suitable for civil and structural applications, as well as increasing staff numbers and licensing levels and advancing the technology for panel products on a commercial scale.

“We are excited about taking the company to its next stage of development,” said Accsys chairman and chief executive officer William Paterson-Brown.

Accsys Technologies has also announced that its fully-owned subsidiary Titan Wood Ltd, which manufactures Accoya, has agreed a deal with Skanfore China SA to produce 500,000m³ of the modified wood product in China.