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COMMISSION
OFTHE
EUROPEAN COMMUNITIES
GeneralSecretariatCOM(79)728 final
Brussels,^December1979
FOROFFIClALUSEONLY
REQUESTFORASSENT,PURSUANT TOARTICLE56.2a)
OFTHEECSCTREATYTOGRANTING ARECONVERSION LOANTO*
"LIGHTNING FASTENERS LTD.,UNITEDKINGDOM"
(Communication fromtheCommission totheCouncil)
COM(79)728final

COMMUNICATION TOTHECOUNCIL
Subject:Requestfor.assent,pursuanttoArticle56.2a)oftheECSCTreaty
tograntingareconversion loantoLightningFasteners :Ltd.,
UnitedKingdom.
I.ESSENTIAL INFORMATION
Applicant :LightningFastenersLtd.
Beneficiary :Same
Project :Modernisation andexpansionofzip
fastenermanufacturing facilities
Location :Peterlee,Co.DurhamandClea^orMoor,
Cumbria,NorthernRegion
Investment :b3.35m
Loanrequested :b1.6m(+2.468mEUA)
Jobscreated :149
Interestreduction :60,000EUAperyear,forfiveyears.
II.CONFORMITY WITHARTICLE56OFTHEECSCTREATY
t
TheprojectsforwhichECSCfinanceissought,arelocatedatCleatorMoor,
WestCumbriaandPeterlee,SouthEastDurhamandarepartoftheNorthern
RegionwhichcoversthecountiesofTyneandWear,Cleveland,Northumberland ,
DurhamandCumbria.Theregionhasapopulation of3.2mandaworkforce
of1.3m(approximately 5%oftheinsuredworkingpopulationoftheUK).
Ithasahistoryofdependence upontraditional heavyindustries,coal-
mining,shipbuilding ,heavyelectrical andmarineengineering andametal
manufacture,allofwhichhavesufferedadramaticdeclineinthepast
25years.
•••/•••
Provisiono !oddress:RuedelaLoi200,B–1040Brussels-Téléphoné350040-358040-Télégraphieoddress:«COMEURBïussels»-
Telex:•COMEURBRU 21877.

WestCumbriaisdefinedasthetravel-to-workareasofWhitehaven (in­
cludingCleatorMoor)andWorkington,bothofwhichhaveSpecialDevelop­
mentAreastatus.Industryisconcentrated onthecoastalstriparound
Whitehaven,WorkingtonandMaryport.Theproblemsoftheareaaredue
mainlytothedeclineofthecoalandironindustriescoupledwithits
distancefromthemaincommunication arteries.
Thecurrent(May1979)unemployment rateforWestCumbriais7.1%
(7.0%males)comparedwiththeNorthernRegionrateof7.8%(9.0%males)
andtheGreatBritainrateof5.2%(6.3%males).
TheSouthEastDurhamareacomprisestheEmploymentOfficeareasofPeterlee
andWingate.Thewholearea.hasSpecialDevelopment Areastatus.
IncludedinthisareaisPeterleeNewTownwhichwasdesignatedin1948.
Buildingwasstarfed'irl1950andasteadygrowthhastakenpopulation up
tothepresentfigureof'26,000.Situatedbetweenthegreatmanufacturing
centresofTyne/WearandTeejside,Peterleedrawsmuchofitsworkforcefrom
traditionaldecliningindustries-steelworks,shipbuilding,coal-mines,etc.
TheSouthEastDurhamareahasacurrent(M.ay-1979),unemploymentrateof
9.9%(9.8%males)comparedwiththeNorthernRegionrateof7.8%(9.0%males)
andtheGreatBritainrateof5.2%(6.3%males).
THEUNDERTAKING
LightningFastenersLimitedisaprivatecompanybutasubsidiaryofa
quotedpubliccompany,IMILimited,incorporated in1925.*
LightningFastenersowns100%CleatorFastenersLimitedandClixFasteners
Limited. \
Theregisteredofficeandtheheadadministrative officeisat
KynochWorks,Witton,Birmingham.Thefactoriesare:
1.LightningFastenersLimited
KynochWorks
Witton,Birmingham
2.CleatorFastenersLimited
EnglishIndustrialTradingEstate
CleatorMoor",Cumbria
3.ClixFasteners(UK)Limited
ArmstrongRoad,
Peterlee,Co.Durham.
Natureofbusiness :Manufacture andsaleofzipfasteners
Labouremployed :Birmingham
CleatorMoor
Peterlee693
184
354

LightningFastenersLimitedis.theUKpartoftheLF/OptiGroupof
Companieswhichisownedona50%/50%basisbyIMILimitedandtheHeilmann
familyofGermany.TheLF/OptiGroupmanufactures andsellsthroughout
Europe,intheFarEastandinNorthAmerica.Majormanufacturing plants
inEuropearelocatedintheUK,GermanyandFrancewithsmalleroperations
elsewhere.TotalsalesoftheGroupareabouth100millionwithnet
assetsofaboutb60million.TheGroupemploysover8.000people.
THEPROJECT
Theprojectisacombination ofmodernisation andnewactivity.The
modernisation coversexistingproductswhicharetechnicallycompetitive
butrequireanimprovementinmanufacturing costs'.Thenewactivity
istheintroduction ofatotally>»^wfastenerfortrousersanddresses.
Ofthetotalcapitalcost.ofb3.35m/^l'm.,wi11be-:incurredat
CleatorMoorandb1«35mat-.,Peterlee.Itisimportanttonotethat
whilsttheproposedinvestment WiiIbephysicallydividedbetween
Cleat-orMoorandPeterlee,theprojectisessentiallyintegrated;some
oftheemploymenttobeprovidedatPeterleeisdependentupontheinvest­
mentatCleatorMoorandviceversa. •■
Theprojectconsistsoffourmaininvestments :
a)Theintroduction ofacompletely n$wproductrecently
developedinGermany.TheproductiscodenamedEC21.
Thisproductislowerincostthantheexisting4mmproduct
soldintheUKandinseveralwayssuperiorinquality.»,
b)Theadditionofamoreeconomicbutcommercially proven
variantofthecompany'sRecord10(6mm)openendproduct;
'■itwillincreasesalesinthissectorandreplaceinpartsome
ofthepresentlymoreexpensive LFsales.
c)TheprovisionofdyeingfacilitiesatPeterlee.
Thesefacilitieswillimprovemanufacturing costsanddelivery
service,especiallyfortheEC21productwherefastdelivery
isessential.
d)TheupdatingofRecordchainmakingfacilitiesatCleatorMoor
totakeadvantageofthelatesttechniwuesdevelopedandproven
withintheGroup.
Theequipmentwillbelocatedasdetailedbelow:
Dyehouse )
->*r-•u- )ClixFastenersLimited,
EC21Finishing ,peterlee,Co-0urham
LystatypeRT10OpenEndFinishing )ClixFastenersLimited,
Peterlee,Co.Durham
EC21Chainmaking
RT10ChainmakingCleatorFastenersLimited,
CleatorMoor,Cumbria

Theprojectwi11haveaprogressivetimescale;someelementswill
comeonstreamduringtheearlypartof1980whilstthedyehousewillnotbefullycommissioneduntillate-1981/early-1982.
EMPLOYMENT
Thefollowingtablesummarisesthelabourrequirements •
1980 1981
ClixfastenersLtd.
Peterlee,Co.Durham
Staff
Maie...-
Full-timefemale
Part-timefemale
Total
CleatorFastenersLtd.
CleatorMoor.Cumbria9
14
7
8
385
16
211982
7
30
6
14
57Total
21
60
13
22
116
Staff
Maie
Full-timefemale
Part-timefemale2
53
8
7
85
13
7
8
Total
TotalByYear 4526
47 5733
149
BoththefactoriesatPeterleeandCleatorMoorhaveestablishedtraining
programmesfornewrecruits.Inthecaseofcraftsmen,thisconsists
largelyofproductandmachineryfamiliarisation .ForoperativesLfemploy,
ateachfactory,full-timestaffwhoareversedinallstagesofmanufacture.
Thesestaffteachandmonitornewrecruitsundernon-incentive conditions
untilanacceptablelevelofperformanceisreached.ItisLF'spolicy
tomaintainmaximumemployeeflexibility andtothisendthecompany
operateanongoingtrainingprogrammedesignedtoincreasetheareasin
whichemployeescanbsteffectively deployed.
Forstaff,in-housetrainingfacilitiesofLF'sparentcompanyinthe
UK,IMILimited,areused.Theyprovideafullrangeofbothspecialist
andgeneralcoursestoteachand/orimproveskillsasappropriate.In
addition,arrangements havebeenmadeforspecialisedtrainingon
muchofthenewequipmenttobecarriedoutatGroupfactoriesinGermany
wheretheequipmentisalreadyinoperation.

-5-
VI.ENVIRONMENTAL ASPECTS
Theonlypotentialpollutantgeneratedbytheprojectiswaste
dyeingliquid.Thequantityproducedwillbesome250,000gallons
perweek.Treatmentmethodsforwastedyeingliquidarewell
established andconsistofsettlingtanksandchemicaltreatment.
Thequalityofliquiddischargedintoexternaldrainagesystemsis
».subjecttoregularanalysisandiscontrolled bylocalauthority
instruction .
Personalinjuryispossibleinthedyehouseasinanyareawhere
chemicalsareused.Appropriate protective equipment mustbeworn
byemployees.Therisksareminimaliftheprescribed procedures are
followed-noseriousinjuryhaseveroccurredinthecompanydue
tothesubstances inquestion.
VII.MARKET
LF'scurrentshareinthezipfastenermarketoftheUKisabout33%.
Theexpectedmarketsharewillbe30%to33%.Thisexpectation is
basedontheintenttoeliminate somepresently uneconomic products,
thesalesofwhichmayormaynotbecompensated .forbytheprojected
productrange.LFbelievethatthisprojectionisconservative and
that,infact,salescouldexpand,buttheviabilityoftheproject
doesnotdependonexpansionnorevenoncompletemaintenance oftheir
currentmarketshare.
VIII.FINANCING
b000
Thetotalfinancerequiredis:
FixedAssets
Machinery andPlant
WorkingCapital3,350
1,379
4,729
Thesourcesoffinanceenvisagedare:
ECSCLoan 1,600
FundstobeinjectedbyLF/OptiGroup 1,657
Ot-berexternalfunds- 1,472
4,729,

-6-
IX.CONCLUSION
The Commission considers that the request complies with Article 56 (2a)
oftheECSC Treaty and that theproposed investment iseconomically sound .
Inconsequence theCommission hasapproved aloan toLightning Fasteners
Limited foritsproject atPeterlee ,Co.Durham andCleator Moor ,
Cumbria for amaximum amount of fc1.6m(+2.468 mEUA)oritsequivalent
amount .Interest istobereduced by60.000 EUAperyear forthefirst
five years after thepayment orpayments ofthe loan .
TheCommission invites theCouncil togive itsassent totheforegoing
decision .
\
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