Alco Holdings attributes last year's disappointing profits to high spending on new machinery and says it plans to scale down its investments this year. Profits for the consumer electronics maker fell 13 per cent to $121 million for the year to March, despite increased turnover of $3.1 billion, a 21 per cent rise. Alco chairman Kimen Leung Kai-ching said the company would spend $80 million this year compared to more than $120 million last year, most of which would be directed to its car audio division. Major investments for this year include $20 million for a new polyfoam factory in Houjie, China, which will produce packaging for Alco's products and other manufacturers. 'The new factory would be able to double the production level, and might bring in up to $7 million each month,' Mr Leung said. Models being developed include 15-channel cordless telephones and telephones with digital answering functions, Mr Leung said. He said the emphasis of the company would remain on audio products.