Shangling heats up fridge production

SHANGHAI Shangling Electric Appliances has mapped out an aggressive capital expenditure plan into next year, requiring an investment of 483 million yuan (about HK$430 million).

Vice-chairman Jiang Shilong said yesterday that as well as expanding existing refrigerator production lines, it would increase the proportion of air-conditioners and microwave ovens.

He said the demand growth rate for air-conditioners in China was much higher than for refrigerators.

Competition in that sector was fierce, with already more than 100 manufacturers of air-conditioners on the mainland, he said.

But Mr Jiang said: ''We're convinced that we'll do well in the sector.'' Some 180 million yuan would be earmarked for a new refrigerator facility which could produce up to 300,000 250 to 270-litre units.

Mr Jiang said the facility, to be completed by next year, would be compatible with Mitsubishi refrigerators.

An additional 90 million yuan would be set aside for larger-size refrigerators, which would be produced by the 50-50 joint venture with Tian An of Hong Kong.

''The project is expected to be operational by the second half of this year, with an annual capacity of 100,000 units,'' he said.

The company would also spend 53 million yuan to expand microwave oven production, for an annual output of 200,000 units.

For production of oil heaters, the last project on the drawing board, 160 million yuan will be required.

For the year ended December 31, Mr Jiang said the company's short-term loans amounted to 283.5 million yuan while long-term loans stood at 26.1 million yuan.

In January, the company raised US$52.5 million in a B-share issue for its listing in Shanghai.

The issue, however, was snubbed by investors. The price of the shares has been falling since the listing. It stood at 59.8 US cents on Friday, compared with the issue price of 75 cents.

Zhao Lizhen, director and chief accountant, said at current prices the company should appeal to investors.

The firm will embark on a two-week roadshow to Singapore, Europe and the US.