Turnover surges 45pc for pipe manufacturer

PUBLISHED : Monday, 28 March, 2011, 12:00am
UPDATED : Monday, 28 March, 2011, 12:00am

Hong-Kong-listed plastic pipes and pipe fittings manufacturer China Liansu Group Holdings announced that its turnover for the year ending December 31 was 7.71 billion yuan (HK$9.17 billion), an impressive rise of 45 per cent over the same period in 2009.

Announcing the results, Liansu says its net profit for the period rose to 14.7 per cent, compared with 12.1 per cent a year earlier.

Profit attributable to ordinary shareholders in the company for the period increased by 75.8 per cent to 1.13 billion yuan.

China Liansu's board of directors proposed that a dividend of 12 HK cents per share be paid out for the period.

The company is the largest manufacturer of plastic pipes and pipe fittings on the mainland, producing more than 70 series and 7,000 specifications, and has strong research and development capabilities.

The company's products are widely used in water supply, drainage, power supply and telecommunications, gas supply, agriculture, floor heating and firefighting.

Headquartered in Shunde, Guangdong province, the company has 12 production facilities in eight provinces and autonomous regions across the mainland, and a nationwide sales network.

During the year, China Liansu further strengthened its leading position in the plastic-pipes and pipe-fittings industry on the mainland, with strong revenue growth.

Total sales of plastic pipe fittings for the year was about 789,000 tonnes, an increase of some 39.4 per cent over the previous year. The growth in sales of China Liansu's seven major products reflected a stable upward trend, the company says.

China Liansu expanded its production capacity to 1.15 million tonnes last year from 906,000 tonnes in 2009, representing an increase of 245,000 tonnes. The expansion was to meet rapidly growing market demand. The company is building new production plants in Urumqi and Changchun.

The first phase of a 12,000-tonne increase in production capacity in Urumqi was completed by the fourth quarter of last year. The company has also been adding new production lines to its existing base. It is expected that China Liansu's designed annual production capacity will increase by 370,000 tonnes and 330,000 tonnes this year and next year, respectively. By the end of next year, the group's designed annual production capacity is expected to reach 1.85 million tonnes.

While maintaining its construction plan, the group managed to find suitable parcels of land in Shaanxi province to further increase its coverage in these regions.

To improve product quality and expand its product range, in response to customer requirements and increasing market demand, China Liansu has put an emphasis on new technology, and has established a research and development centre.

In addition, the group has been conducting research and development in the area of high-performance, low-energy consumption and environmentally friendly products related to water and gas.

In response to the central government's drive for environmental protection, the group also offered a greater number of environmentally friendly products during the period.

Looking ahead, the company sees the mainland market undergoing a period of increasing domestic demand and rapid economic growth. With gradual urbanisation in China, the water-supply pipe market will grow and the market for drainage pipes in cities will see rapid development.

One of the key messages of the central government's 12th five-year plan is to foster the development of infrastructure and to improve the integrated transportation system, including railways and highways.

The company notes that the central government has also committed itself to a medium-to-long-term urban-housing construction programme. As part of this programme, Beijing will be investing in the building of low-rent subsidised apartments, and in upgrading dangerous houses in rural areas.

The document, 'Decision of the Central Committee of the CPC and the State Council on Accelerating the Water Conservancy Reform and Development', proposes speeding up the construction of water conservancy infrastructure throughout the mainland and establishing a mechanism for the steady growth of investment in water conservancy.

Water saving in irrigation systems, water safety in rural areas, urban water supply and sewage treatment system construction, and water pollution prevention and control systems are all key areas that will be supported under the five-year plan.

With the rapid development of the mainland's economy, the market demand for various consumer products has also continued to rise.

Accordingly, the company says that new materials have become one of the key industries for development, bringing infinite business opportunities for plastic pipes manufactured by the group.

China Liansu says that it will continue to provide safe and environmentally friendly pipes for water supply, drainage, gas, hot water and value added products through the group's sales network in the future.

Since 2009, the company's total designed annual production capacity has increased sharply and it expects to continue to expand its production capacity at its various plants in the coming year.

Steady growth

After a 12.1 per cent rise a year earlier, China Liansu Group Holdings' net profit for the year ending December 31, 2010 increased by: 14.7%