KUALA LUMPUR (March 19): Eonmetall Group Bhd has obtained the rights to manufacture the "Constructor" brand of static racking products from Norway's Gonvarri Material Handling AS.

With the rights, Eonmetall plans to set up a production facility based on Gonvarri Material Handling's design and technology requirements.

In a filing with Bursa Malaysia today, Eonmetall said it has entered into a cooperation agreement with Gonvarri Material Handling, which enables both companies to expand on their mutual plans for local production and sales of material handling products portfolio under the "Constructor" brand name in Asia, Bangladesh and China by Eonmetall.

"The strategic alliance provides an opportunity for Eonmetall to expand its range of products and market presence in Asia initially by capitalising on its partnership with a world-class producer of material handling equipment to produce and to sell an established portfolio of high quality products under the Constructor brand name," it added.

Apart from Constructor, Gonvarri Material Handling also carries the Kasten and Dexion brands and is one of Europe's leading engineering and manufacturing groups of storage solutions and material handling.

"The manufacturing licence agreement for static racking products and the brand licence agreement are ancillary to the cooperation agreement and will organise and govern the local production and distribution of the said Constructor product portfolio and use of Constructor brand name," said Eonmetall.

The cooperation agreement is for an initial term of five years, with option to renew for a further five years.

"Gonvarri Material Handling may terminate the agreement if Eonmetall is unable to reach the mutually agreed volume, quality, sales and profits targets," it added.

Eonmetall shares closed up 2.5 sen or 3.79% at 68.5 sen, with 53,000 shares done, bringing a market capitalisation of RM127.77 million.