 2014-10-09 |
|
|
Newzhou Expands Distribution Channels, ACHEM’s New Production Capacity Shows Results
Report by Zhou Yilang, Taipei
Taiwan’s leading tape manufacturer, YC (4306), has benefitted 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. Analysts forecast steady profit growth for the second half of the year.
Regarding the group’s outlook, YC CFO Lin Chien-yu stated that besides the parent company YC, the subsidiary ACHEM (1715) is benefiting from expanded production capacity. Additionally, Newzhou (3171) is actively expanding its self-branded PackMaster distribution channels in Taiwan and China. With increased production capacity at ACHEM Petrochemicals, the overall operational outlook for the group is becoming more optimistic.
Lin noted that when the OPP (oriented polypropylene) market in China was sluggish, ACHEM accelerated its OPP vertical integration efforts. It is expected that the relocation of equipment from the Shanghai plant to the Ningbo plant will be completed by the end of the year, with revenue gradually recovering from September.
Stable Growth for Newzhou
Despite a lackluster revenue performance for ACHEM in Q3, revenue for the first eight months of the year grew 7.43% compared to the same period last year, indicating that the benefits of new production capacity are becoming apparent.
Lin also anticipates that from Q3 onward, increased shipments of PVC (polyvinyl chloride) tape for automotive and protective applications, along with new PE (polyethylene) products beginning to ship, will contribute to a gradual recovery in the company’s operations to high levels.
ACM, the world’s largest OPP tape manufacturer, had an EPS (earnings per share) of NT$0.72 in the first half of the year. Despite a challenging performance due to China’s downturn, vertical integration in the OPP industry, and lower production capacity due to the relocation of the Shanghai plant, analysts are optimistic. With a recovery in the European and American export markets, particularly North America, and the addition of new products and non-operating gains from selling office properties in the second half of the year, profit growth is expected.
In its main business, ACHEM built a PE tape production line at its Yangmei plant two years ago, rapidly providing PE products to Taiwanese factories and exporting to China and Southeast Asia. This is expected to contribute approximately NT$70 million in revenue each month.
Additionally, after integrating its packaging business, Newzhou is showing increasing operational efficiency in Taiwan, and its PackMaster channel in China continues to grow and has started to generate profits. Analysts expect steady growth for Newzhou.
Regarding ACHEM Petrochemicals, an investment by the YC Group, it is still in trial production. Once mass production begins, it is expected to contribute to the industry’s vertical integration synergies, benefiting the company’s operational performance.
ACEM Petrochemicals Still in Trial Production
In recent years, the YC Group has expanded its business footprint with significant investments in Taiwan and China. In 2011, it officially entered the upstream plastics sector by investing in ACHEM Petrochemicals.
YC Group President Li Chih-hsien recently stated that ACHEM Petrochemicals will supply both internal needs and external clients with its acrylic acid and butyl acrylate products. The new plant in Nantong, Jiangsu, is 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. |
|
