Timber products maker Ta Fu International Holdings says rising interest charges hurt last year's net profit of US$10.75 million but it has no short-term intention of lowering debt levels. The company said net profit for the year to December grew 47.4 per cent. A final dividend of 0.327 US cents was recommended. The rising interest charges arose from the purchase of four joint-venture factories in Jilin and Heilongjiang late last year. The Taiwanese-controlled but mainland-based company said its priority was to boost working capital to further expand mainland operations since demand for wood products in China was growing rapidly. Managing director Anthony Fan Yen-ta said even though interest charges had doubled from $4 million in 1995 to $8 million last year, the company was in talks to arrange a syndicated loan to finance a further 19 timber joint-ventures across the border. 'We're quite comfortable with a debt-to-equity ratio of almost 100 per cent,' he said. Short-term loans, used to maintain cash flow, made up 85 per cent of Ta Fu's outstanding debts while the remainder were long term loans of about $2 million, he said. Vice-chairman Yeung Mi-ki said that four of the joint-ventures were expected to help the company maintain profit growth this year. Mr Fan said the company was planning to increase its stake in its timber products factory in Taiwan from 30 per cent to 53 per cent and then spin it off on the Taiwan stock exchange. 'Ta Fu will swap its shares with a 23-per-cent stake of the factory currently owned by chairman Liu [Ching-chih],' he said. The share swap would take place in the first half of next year while the listing would take place in 1999, he said. Ta Fu listed in December last year.