Wasion Meters moves to double capacity and boost overseas sales
Wasion Meters Group, the mainland's largest maker of electronic power meters, plans to more than double production capacity by the end of next year as it steps up efforts to expand overseas sales.
The Changsha, Hunan province-based company, would raise its annual capacity for single-phase meters to between four and five million units by the end of next year from two million units, said chairman Ji Wei.
Mr Ji said the firm would increase capacity for three-phase meters to between 1.2 million and two million units from 480,000 units.
The actual pace of expansion would depend on demand, he added in an interview.
The company sold 730,000 single-phase meters and 326,000 three-phase meters last year.
Single-phase meters are used in commercial and residential buildings that are considered light volume users, while three-phase meters are used by heavy users such as power companies and large industrial plants where higher levels of accuracy are needed.
Mr Ji said the expansion, entailing construction of a new plant, will cost some 300 million yuan and will meet the company's expansion needs for the next two to three years.
Part of the investment was funded by the HK$258 million proceeds from its listing late in 2005.
The firm had HK$158 million in cash at the end of last year.
'China's demand for three-phase meters has been growing at 15 per cent to 20 per cent in the past few years,' Mr Ji said.
'It mainly comes from replacement of mechanical meters and new buildings.'
Mechanical meters are prone to errors over time due to wear and tear and cannot cope with requirements from electricity bill prepayment, long-distance meter reading and billing on different tariffs charged in different time zones of the day.
Mr Ji estimated 6 per cent to 8 per cent of the 1.2 trillion yuan capital expenditure for the five years to 2010 would be spent by the two monopoly distributors, State Grid Corporation of China and China Southern Grid, on power meters, implying an annual demand of 16.8 billion yuan.
While several hundred mainland manufacturers were producing low-end mechanical meters, only about 25 could meet government requirements for electronic products, he said.
The company posted a 30.8 per cent rise in net profit last year to HK$151.73 million, as turnover surged 33.9 per cent to HK$596.91 million. Overseas sales accounted for 7 per cent of last year's sales, mainly to Southeast Asia and Egypt.