EPI looks to diversify with two copper trading joint ventures
EPI (Holdings), a Hong Kong-listed consumer electronics product maker, will sign two non-ferrous metal deals over the next two months in a move to diversify its business, according to chairman and chief executive Joseph Wong Chi-wing.
Mr Wong said EPI would form two copper trading firms with mainland partners with one focusing on the regional market in Guangdong province and another on the international market.
EPI, formerly known as Great Wall Cybertech, hoped to have a controlling stake in the two joint ventures, Mr Wong said, without giving details.
The company, which resumed trading on September 26 last year after a 31/2-year trading halt because of provisional liquidation and restructuring, raised HK$178 million by placing 605 million new shares at 29.5 HK cents each early last month.
Mr Wong said EPI had net cash of between HK$200 million and HK$300 million now and had sufficient financial resources for the development of the new non-ferrous projects as well as this year's capital expenditure.
'Investment in trading firms is not big as they don't involve fixed-assets investment,' he said.
EPI in November entered a deal to form a 180 million yuan joint venture in Qingyuan, Guangdong, with China's largest copper producer Jiangxi Copper to produce copper anodes exclusively for Jiangxi Copper.
The venture, 51 per cent owned by EPI, 40 per cent by Jiangxi Copper and 9 per cent by Qingyuan Tongde, will begin operations in the first quarter this year with an initial annual production capacity of 50,000 tonnes of copper anodes.
Production volume is expected to reach 100,000 tonnes per year next year, representing 15-20 per cent of the annual copper anodes demand of Jiangxi Copper.
The venture was expected to contribute profit to EPI this year, Mr Wong added.
EPI intended to continue the company's principal business in manufacturing consumer electronics products, including television sets, DVD players and home theatre systems, although investment in this sector would not be huge, Mr Wong said.
Instead, the group is exploring investment opportunities to tap into other non-ferrous metal businesses, including aluminium and zinc and hopes to expand its metal business to northeast and central China.
Shares in EPI dropped 4.84 per cent to close at 21.6 HK cents yesterday.
In November EPI signed a 180m yuan deal with Jiangxi Copper
EPI will produce copper anodes exclusively for Jiangxi Copper
The venture will begin operations in the first quarter