CPMC Holdings, the packaging arm of mainland food and agricultural products trader Cofco, plans to expand into the plastic and paper packaging sector.
The company reported a 24.2 per cent drop in revenues generated by its key earner - the production of three-piece tinplate cans - which accounted for more than 40 per cent of total revenues during the first half of last year.
CPMC general manager and executive director Zhang Xin was optimistic despite the drop in revenues, saying he expected strong growth in two-piece beverage cans this year would overcome the slower sales in the three-piece product segment.
'About 40 to 60 per cent of beer sold overseas is sold in two-piece cans. But in China these cans account for just 4 per cent of sales, so there is ample room for growth. After all, glass bottles are not so environmentally friendly,' Zhang said at the company's recently opened factory in Hangzhou.
CPMC is now expected to add four more production lines of two-piece cans in Tianjin, Chengdu and Guangdong, with two of the four new lines expected to open by the end of this year. The expansion plans are expected to boost production capacity by 23 billion cans a year.
The increase in output would ease the company's reliance on outsourced production and generate cash for acquisitions, Zhang said.