The mainland partner of troubled Siu-Fung Ceramics Holdings will increase its stake in a joint venture in Chongqing, Sichuan province, to about 70 per cent after the Hong Kong-listed company failed to pay for its share of equity capital for a big expansion project. Zhang Min, chief executive of joint-venture firm Chongqing Siu-Ceramics, said state-owned Chongqing Ceramics Industrial Co would boost its interest to above 55 per cent and probably to 70 per cent. The venture, initially covering the first phase development with a production capacity of six million pieces, was equally owned by the partners at a cost of US$15 million. The tableware venture is said to be one of Siu-Fung's largest in China. Siu-Fung planned to hold 75 per cent of the second phase, which could cost $41 million. Capacity would be 13 million pieces. Siu-Fung has yet to contribute its equity capital to the second phase. Mr Zhang said Siu-Fung's financial difficulty had not affected the first phase because it had been in production, but the second phase had suffered some delay in equipment delivery. He said the required capital had been secured because the venture had obtained $16 million in export credit from Germany to import equipment. Beijing has also promised to allocate funds to Chongqing Ceramics to allow it to boost the investment in the venture, which was designated as a key project. Mr Zhang said the decrease in Siu-Fung's interest in the venture had given way for the mainland partner to bring in Germany's biggest ceramics maker Villeroy & Boch, which was discussing ways to take a 30 per cent stake.