Mainland company Northeast Electrical Transmission and Transformation Machinery Manufacturing (NEMM) expects this year's sales figures to be maintained at last year's levels, but warns that profitability has been squeezed by falling product prices. Chairman Xiang Yongchun said sales would reach 1.6 billion yuan (about HK$1.5 billion) this year, 2.5 per cent more than the 1.56 billion yuan the company made in 1997. The company secured 1.5 billion yuan in orders to be delivered this year and about 500 million yuan for next year, he said. Sales - of which exports accounted for 10 per cent - amounted to 723.8 million yuan in the first half and its gross margin narrowed to 26 per cent from 30 per cent last year, as product prices fell amid fierce competition. Mr Xiang said prices declined 5 per cent in the first half, but were unlikely to decline further in the second half. The regional economic problems also had an effect. Mr Xiang said one Malaysian customer had delayed a 30 million yuan order originally planned for delivery in the first half, and the new delivery date was still being negotiated. In order to capitalise on business opportunities arising from the Three Gorges Dam project, Mr Xiang said the firm was discussing plans with several foreign parties to offer joint bids for the supply of equipment. He expected the tendering would begin at the end of the year and the result would be known in the middle of next year. To prepare for potential orders from the project, the company was planning a plant in Yichang, Hubei province.