 2014-09-15 |
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Report by Zhou Yilang, Taipei
Taiwan’s leading tape manufacturer, YC (4306), has benefited from actively developing new products and expanding export markets. For the first eight months of the year, the company’s revenue reached NT$13.402 billion, a 3.66% increase year-on-year. The group’s CFO, Lin Chien-yu, stated that with the expanded production capacity of its subsidiary ACHEM (1715), the ongoing expansion of Newzhou’s (3171) PackMaster distribution channels in Taiwan and China, and increased production capacity at ACHEM Petrochemicals, the group’s revenue and profit are expected to continue to grow steadily in the second half of the year.
ACHEM Petrochemicals Increases Production Capacity
Lin noted that ACHEM accelerated its vertical integration efforts when the OPP (oriented polypropylene) market in China was weak. By the end of the year, equipment from the Shanghai plant will be relocated to the Ningbo plant, with a gradual recovery in revenue anticipated from September. Although ACHEM’s recent revenue performance has been subpar, revenue for the first eight months of the year has still grown 7.43% compared to the same period last year, indicating that the benefits of new production capacity are becoming evident.
He expects that in Q3, ACHEM’s performance will improve with increased shipments of PVC (polyvinyl chloride) tape for automotive and protective applications, the launch of new PE (polyethylene) products, and the steady growth of specialized business, leading to a recovery to high levels of operation.
Newzhou’s Stable Growth
Following the integration of its packaging business, Newzhou’s operational efficiency in Taiwan is becoming increasingly apparent. Additionally, the performance of PackMaster in China continues to grow and has started generating profits, suggesting that Newzhou’s operations will also experience steady growth. As for the group’s investment in ACHEM Petrochemicals, it is currently still in trial production. Once mass production begins, it is expected to contribute to the overall operational performance of the company through industry vertical integration synergies.
In recent years, the YC Group has been expanding its business footprint by investing in significant projects in Taiwan and China. In 2011, the group officially entered the upstream plastics sector with an investment in ACHEM Petrochemicals. Group President Li Chih-hsien recently stated that ACHEM Petrochemicals will supply acrylic acid and butyl acrylate products not only for internal use within the YC Group but also to external clients.
The new plant in Nantong, Jiangsu, represents the YC Group’s largest investment to date. Acrylic acid is primarily used in applications such as general acrylate, polyacrylic acid, high-absorbent water-based resins, water treatment agents, and cleaning agents. Butyl acrylate is used in adhesives, sealants, and coatings. |
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