Kwong Fong Industries Corp (廣豐實業) yesterday unveiled a major property development plan, its first step in a bid to transform from an unprofitable towel manufacturer into a land developer.
Kwong Fong is one of many traditional manufacturers that hopes to profit amid a strong real estate market by revitalizing idle assets in cooperation with local government urban development programs.
“Next year will be an important year for Kwong Fong. The company will transform itself into a company focused on the land developing sector,” George Chiu (邱垂益), a vice president of Kwong Fong, told an investor’s conference.
The company intends to spend NT$1.86 billion (US$58 million) on building a commercial center and another unspecified amount on building a housing complex on a 47,000 ping (15.5 hectare) plot in Taoyuan County where the company’s towel factories used to be.
“We decided to revamp our assets after many years of losses in the towel and textile business as Taiwan’s industrial landscape has changed,” Chiu said.
The company plans to sell the housing compound in the first quarter of next year after obtaining a construction license for the first part of a five-phase, 13,000 ping housing complex plan.
The first-phase construction could cost around NT$1.13 billion, the company estimated.
Kwong Fong expects to earn NT$437 million in profit from the project following the completion of the first phase in 2012.
The revenue would be around NT$11.27 billion, the company projected.
The company posted losses of NT$48.8 million for the first three quarters, improved from NT$169 million a year ago.
Revenue fell 12 percent year-on-year to NT$288 million in the nine-month period, from NT$328 million, company financial statements filed to the Taiwan Stock Exchange said.
Shares of Kwong Fong rose 1.72 percent to NT$11.8 yesterday.