Yip's Hang Cheung plans fifth petrochemical outlet
YIP'S Hang Cheung's master plan of establishing a petrochemical chain-store in the Pearl River Delta is well on its way to fruition, with another outlet being set up next year to bring the total to five.
Chairman Tony Ip Chi-shing said the company would decide on the site by the end of the year, but was expected to be between Dongguan and Gaungzhou.
The latest outlet is expected to begin operation by the end of next year.
Mr Ip said the new chain-store would serve the needs of its clients and tap the potential market there.
The existing stores are in Zhongshan, Dongguan, Baoan and Huiyang.
They produce either mixed-solvents, or paints and mixed-solvents.
'The petrochemical chain-store will cope with the needs of the company's development, which will still focus its business in the Pearl River Delta in the future because there is a huge market,' Mr Ip said.
In addition to its three divisions - paints, mixed-solvents and trading - Yip's Hang Cheung has diversified into lubricants, building re-decoration, storage tanks and packaging.
The diversification is part of the company's expansion strategy.
A new lubricant manufacturing factory in Zhanjiang is expected to be in operation next March.
Mr Ip said the setting up of a new division not only provided an enhanced infrastructure to support its core business - the manufacture and distribution of paints and mixed-solvents - it also reduced production costs.
But more importantly, he said, it met the great demand for lubricants on the mainland.
There was a demand for 20 billion yuan (about HK$18 billion) worth of lubricants every year in China, but Hong Kong sold only $2 to $3 billion worth to the mainland.
To tap the attractive China market, the lubricant manufacturing factory will produce 70 per cent of its oil for motor-vehicle use and 30 per cent for industrial uses.
Sales volume will reach 20,000 tonnes within three years, and by then turnover is expected to be $200 million.
To diversify its business, Mr Ip said the company would continue to develop new related businesses, but had no intention of speculating on property development.
At present, the company has a total of 13 factories in China.
The paint manufacturing factories in Changchun and Jinan will start operation by the end of the year and early next year respectively.
For the year ended March 31, the company reported a 16 per cent rise in net profit to $92.56 million.