FOAM Foamasters

    RNS Number : 2462V
  FoaMasters International Limited
  27 May 2008
   

 For immediate release  27 May 2008

    

    FoaMasters International Limited

    ("FoaMasters" or the "Company")

    AGM & Trading Statement

    FoaMasters International Limited (AIM:FOAM), a leading Asia-based manufacturer and producer of high-quality polyurethane flexible foam
and finished products today announces an update on trading and the result of its Annual General Meeting held on the 26 May 2008.

    Trading Update

    During the first quarter of 2008, the Company manufactured 6,650 tonnes of polyurethane based foam products from its 8 plants in China
and Vietnam. The Company has made further progress in the development of its international and domestic customer base compared to the same
period in 2007. Manufacturing also benefited from the introduction of Mobius technology across its wider range of products.

    As stated at the Company's preliminary results for the year ended 31 December 2007, trading has become increasingly challenging, and as
the business has moved into the second quarter, this position has deteriorated.

    Growth in sales achieved since the start of 2008 has been slower compared to the same period last year. The Company has also seen its
gross margin decrease in the year-to-date trading, reflecting the global economic slowdown in a numbers of its core customer markets; steep
pricing inflation for a number of its key raw materials and also disruption in the domestic Chinese market due to various natural disasters.
 As a consequence of this, management now believe that its financial performance for the full year will be below market expectations.

    Through its economies of scale and management systems, the Company believes that it is in a good position to offset the medium term
impact of this challenging pricing environment as it is able to pass some of the cost increases on to the end customers. This will assist
the Group's performance in the later part of 2008 and beyond.

    In addition, since the start of 2008, FoaMasters has continued to implement its strategy to build a stronger business for the long term.
This has included increasing the use of Mobius' environmentally friendly technology and the overall efficiency of each individual plant,
which has in part offset the higher raw material costs experienced. 

    Furthermore the Company is pleased to announce the installation of its second production line to produce Mobius powders, which enables
the recycling of polyurethane (PU) powders and can be subsequently fed into the traditional PU foam production circuit.  Utilising Mobius
powders potentially reduces overall production costs, whilst capitalising on the ever-environmentally conscious purchasing trends in Europe
and the USA. This second production line will be installed at the FoaMasters production facility in Zhejiang, China and is expected to be
fully operational by October 2008.

    FoaMasters is also pleased to announce the official launch of its EnviroMasters* product range. EnviroMasters* products utilise Mobius
technology, which offers lower product wastage whilst increasing production efficiency, in addition to utilising recycled powders, reducing
the need for raw material sourcing. The product will be used in FoaMasters new mattress range called 'Evergreen' which uses a base material
of bamboo, which is fully renewable, in addition to containing naturally occurring anti-bacterial agents and has excellent stretch and
recovery characteristics. Early indications from key customers are that this product range is being well received in FoaMasters' target
markets. FoaMasters has also been increasing its sales and marketing efforts for its S'fonia own-brand product range, which is also
increasing in the overall sales mix of the Group.

    Result of Annual General Meeting

    Following its Annual General Meeting which was held yesterday all resolutions put to the shareholders were passed.

    For further information please contact: 

 FoaMasters International Limited            +852 2887 7361
 Jack Cheong, Chief Executive Officer
 Richard Cheong, Deputy Chief
 Executive Officer
 Teh Kim Seng, Non-executive Chairman

 Hanson Westhouse Limited                  +44 20 7601 6100
 Tim Metcalfe
 Anita Ghanekar
 Martin Davison
 Christine Zhang

 Buchanan Communications                   +44 20 7466 5000
 Ben Willey                            benw@buchanan.uk.com
 Suzanne Brocks
 Nick Melson
 Christian Goodbody

    Notes to Editors:

    FoaMasters, a leading Asia-based manufacturer and producer of high-quality polyurethane flexible foam and finished products, was founded
in 1964 by the Cheong family and was admitted to trading on AIM in December 2007.

    The Company has built up a significant presence in Asia, with 9 production facilities in China and Vietnam serving many internationally
recognised brands in the USA and Europe including Wal-Mart, Aprica, LA-Z-BOY, Nike, Littlewoods, Land of Leather, Primo, JC Penny, IKEA,
Staples, Office Depot, Office Max, Steinhoff Furniture, SpringAir, Toy R US, Target and Bed Bath and Beyond. FoaMasters produces a wide
range of high quality flexible polyurethane foams including flame retardant, memory, high resilience, injection moulded and environmentally
friendly foams for use in a variety of industries including bedding, footwear and furniture. In 2006 the Company established its own brand
label 'S'fonia'.

    FoaMasters has numerous accreditations including SATRA and the International Standards Organisation ISO 9001 and ISO 14001
certifications. In addition, the Group's products have been accredited the stringent Fire Retardant Standard BS5852 (UK) and CAL TB 117
(US), which is advantageous to the Group's marketing in Europe and the USA.

    The Company has developed a range of environmentally friendly flexible polyurethane foam products including CFC free foam and memory
foam for energy absorbent applications and the bedding industry. Recent innovations include the production of micronised PU powder which is
made through the recycling of foam by employing technology licensed from Mobius Technologies Inc. in the US. The Group aims to produce a
series of 'green' foam products in 2008 utilizing this technology and eventually the technology will be used in all the Group's products.
The Directors believe that the ability to recycle foam which will be mainly supplied by its own production waste could reduce production
costs and open up further sales opportunities to more environmentally conscious markets including the Europe and the USA. The Group also
intends to commence production of latex foam, sourced from organic raw materials, and is currently increasing production of rebonded scrap
foam for use as carpet underlay. For more information on FoaMasters, please visit www.foamasters.com.

This information is provided by RNS
The company news service from the London Stock Exchange
 
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