Vitamin C producer China Pharmaceutical Enterprise and Investment Corp has had to rely on increased production to give it a shot in the arm this year after suffering pressure on its profit margin and higher interest and depreciation expenses.
Director and vice-general manager Wang Xianjun said the financing of a new production line was expected to boost interest expenses to 20 million yuan (about HK$18.6 million) this year, from six million yuan a year ago.
Earnings would rise as annual production capacity was expanded to 5,000 tonnes from more than 1,000 tonnes.
Profit margin should be able to stay at the present level as the fall in product price would be compensated by the drop in raw material price, Mr Wang Xianjun said.
The prices of raw materials and products fell about 30 per cent this year.
The price of mainland-produced vitamin C was kept down internationally on the expectation of a massive increase in capacity in China that would outstrip demand, Mr Wang Xianjun said.
This was despite the fact that exports from China rose only 10 per cent in the first quarter of this year.
