Specialty fiber maker Zoltek Companies Inc. (NASDAQ: ZOLT) has signed a deal with auto parts manufacturer Magna International Inc. (NYSE: MGA) to develop low-cost carbon fiber sheeting molding compounds for the auto industry. To date, Zoltek’s carbon fibers have been used primarily by the wind turbine industry to fabricate the housings for the turbines.
Zoltek’s CEO said:
We have long regarded the automotive industry as the largest potential user of low-cost, high-performance carbon fibers, and it is a vital part of our strategy as the largest producer of these fiber[s] to work closely with leading suppliers to the automotive industry of parts and sub-systems.
Magna, with a market cap of more than $11 billion, certainly qualifies as a leading supplier. The two companies did not provide specific details of their agreement.
Zoltek’s shares are up nearly 17% at $11.90 in a 52-week range of $5.60-$15.01.