YIZHENG Chemical Fibre Co's acquisition of a competitor in southern China may be the first in a string of mergers aimed at boosting its production capacity and market share, says a senior company official.
Vice-chairman Ren Chuanjun said China's largest polyester maker, which trades H shares in Hong Kong, would continue to take over smaller companies as opportunities arose, as well as to invest in new plants.
A clear outline of the company's intentions for the ninth five-year plan to 2000 would probably be ready by the end of the year.
'If other suitable merger and acquisition opportunities arise, we won't turn our backs on them because they are excellent ways to develop Yizheng,' Mr Ren said.
Along with announcing its interim results on Monday, Yizheng said it had gained 100 per cent control of Foshan Chemical Fibre Joint Corp (FCF Group), the nation's fifth largest polyester producer.
Yizheng took control of FCF Group's production in return for guaranteeing 1.08 billion yuan (about HK$1 billion) of its debt and agreeing to pay 94 million yuan for land-use rights.
The acquisition will boost Yizheng's production capacity to 770,000 tonnes next year.