Tenon [NZX: TEN], whose locally produced wood mouldings are sold in the US, will expand its business across the Tasman, supplying the Woolworths and Lowe's Home Improvement joint venture Masters Home Improvement stores.
The Taupo-based company has set up a new Empire Mouldings Australia unit to sit alongside its existing business across the Tasman to serve the 49 Masters stores and help the Woolworths-Lowe's venture grow to 150 stores, it said in a statement. The Tenon unit will replicate a similar deal it has with Lowe's in the US. Product will be supplied from Tenon's Taupo and Victoria manufacturing sites.
Tenon is targeting a breakeven result for the unit in the 2015 financial year, with a positive earnings contribution thereafter.
"We are excited by the prospect of growing with Masters, and replicating the successful model we have developed in the US over the past 20 years, as Masters expands its market share in Australia," Tenon chief operating officer Tony Johnston said. "This in an important step in Tenon's market development, demonstrating the potential of our fully integrated manufacturing and full-service distribution business platform to build long-term value for our customers and Tenon."
The shares fell 1.3 percent to $1.52, and have gained 6.2 percent this year.
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