SOLVENTS and paints maker Yip's Hang Cheung (Holdings) has formed a $15 million joint venture with Guangdong Jiangmen Solvent Factory to manufacture solvent chemicals in Jiangmen. The joint venture is expected to lower the production cost of Yip's Hang Cheung and insulate the group from the impact of the yuan's devaluation. The group said production of the solvent chemicals would also produce good profits in view of the strong demand from local and export markets. Yip's Hang Cheung has a 60 per cent stake in the joint venture, with the remaining 40 per cent owned by the Chinese partner. The first phase of the joint venture is expected to generate annual sales of $55 million and a gross profit margin of 10 to 12 per cent.