Plastics manufacturer and trader Luen Fat Hong International says attributable profit soared 75 per cent to $70 million in the year to March, buoyed by increased productivity generated by three new production lines in China. Group chairman William Wong Chak-ming said the three lines in Beijing, Chengdu and Zhanjiang would reach full capacity in the second quarter of next year, with an annual output of 21,000 tonnes from the existing 15,000 tonnes. He said production capacity for the first four months of the current financial year had increased 25 per cent compared with the corresponding period. The result came on a turnover of $1.04 billion, up 65.9 per cent, while earnings per share rose to 26.7 cents, from 17.8 cents. Directors declared a final dividend of eight cents per share against no payout last year. No interim dividends were paid. Though the group's main source of income has been PVC floor coverings, group president Tang Kuan-chien said he expected to see vibrant growth for PVC leathers and PVC sheetings in coming years. Mr Tang said the group had also benefitted from newly-introduced technology in PVC floor coverings. Manufacturing operations accounted for 44 per cent of total turnover while trading accounted for 56 per cent. Mr Wong said PVC sheets were enjoying the highest gross profit margin of all the company's products. 'The margin is now close to 20 per cent, but it may reach 24-25 per cent with the price of raw materials dropping,' he said. He added the price of PVC raw materials currently stood at US$660 per tonne. Two additional production lines in Dongguan, which are mainly for the production of PVC sheets, are expected to be operational by the end of this year. Apart from the existing five trading points located in the northern and central parts of China, Mr Wong said two to three trading points were expected to be set up in the south-eastern region this year. He said the group's distribution network would also be broadened with an additional two to three distribution points coming into force later this year. Though Mr Wong was reluctant to unveil the group's share of the huge China market, he suggested it had 14 of a total 120 PVC production lines in China.
