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Christine Chan

Washing machine maker Wuxi Little Swan Co has made an aggressive expansion drive this year, announcing four new Sino-foreign joint ventures and branching into pharmaceuticals manufacture and other projects.

It said the moves, part of plans to boost growth leading up to 2000, would increase annual profit by 226 million yuan (about HK$210.63 million) and turnover by 2.08 billion yuan.

The increase is significant compared with its profit of 147.2 million yuan in 1995 and forecast profit of 175.8 million yuan for last year.

The investments will be backed by the 734.4 million yuan proceeds from the issue next Tuesday of 60 million A shares to be priced at 12.24 yuan each.

 It issued HK$312.48 million worth of B shares last June.

Trading in its A shares will begin on the Shenzhen stock exchange on March 28.

The company, based in Jiangsu province, has 40 per cent of China's market for fully-automatic washing machines, with a 1.2 million machine capacity.

It has seven Sino-foreign joint ventures with partners including German's Bosch-Siemens and Japan's Matsushita to make washing machines, refrigerators, compressors and kitchen appliances.

Gu Jiuming, an official at the securities department, said new joint ventures included a semi-automatic washing machine project costing US$27 million; moulding facilities requiring investment of US$24 million; a household appliances components project for US$20 million; and an amino acid project requiring investment of 100 million yuan.

He would not name the foreign partners.

Mr Gu said the semi-automatic washing machine project would have an annual capacity of 800,000 units and yield profit of 40 million yuan a year.

The moulding facilities would generate 43 million yuan in profit, and the component project 35 million yuan on a turnover of three million sets, he said.

He said the company diversified into pharmaceutical production because the project provided high returns.

The company expected to reap 60 million yuan in profit out of an investment of 100 million yuan, he said.



Aggressive Little Swan eyes profit rise as joint ventures take off