Ka Shui Holdings, a Shenzhen-based moulding company that sources said was moving towards an initial public offering, is to spend more than HK$100 million to double capacity and upgrade machines to use cheaper raw materials.
The company, whose customers range from computer maker Lenovo Group to razor-blade manufacturer Schick, said it would increase capacity to at least 22,000 tonnes per year within two years by adding a new plant at Daya Bay, in Huizhou, Guangdong province.
Ka Shui is expanding to take advantage of a domestic moulding market that it forecasts will grow at about 14 per cent annually until 2010, or six percentage points higher than the growth rate of the global moulding market.
Only about 30 of the mainland's 3,000 moulding companies had annual production of more than 5,000 tonnes, chairman Lee Yuan-fat said.
'Our advantage is that we are able to mould all the zinc, magnesium and aluminium products in a one-stop service,' Mr Lee said.
Machines would be upgraded to add capacity to mould products with magnesium and aluminium instead of zinc, helping customers to reduce cost.
The increase coincides with the country's expanded output of magnesium. 'China has surpassed Norway as the biggest supplier of magnesium in the world,' Mr Lee said.