Chain Yarn Co (展頌), the nation’s fourth-largest nylon maker, yesterday announced the formal completion of its new plant in Nantou County’s Jhushan Township (竹山), which it said would generate annual sales of NT$3.6 billion (US$122.5 million).
The plant will help revenue this quarter increase from last quarter’s NT$1.96 billion and solve the company’s constant capacity constraint problem, Chain Yarn said.
Last quarter, Chain Yarn’s factories were operating at full capacity, because its nylon 66 fibers were in high demand, said Alex Yu (尤智賢), executive special assistant of the company.
Revenue in the second half this year is also expected to rise more than the NT$3.55 billion posted in the first half, he said.
The company has invested NT$2.5 billion in total for a four-stage plan to build the new plant starting in July last year, after an old factory at the same venue was damaged by a fire three years ago, Chain Yarn chairman Huang Chen-yi (黃呈玉) said during yesterday’s celebration of the completion of construction.
The new plant, located in the Nangang Jhushan Industrial Park (南崗竹山工業區), can produce 10,500 tonnes of nylon 66 fibers a year and 19,500 tonnes of nylon 6 fibers annually, the company said.
The new plant means Chain Yarn’s production capacity of nylon 66 fibers has increased to 14,500 tonnes a year, Yu said, adding that nylon 66 fibers are sold to Everest Textile Co (宏遠興業) and Eclat Textile Co (儒鴻) to make functional clothes and to Toung Loong Textile Manufacturing Co (東隆興業) to make nylon 66 yarns.
The company’s capacity to make nylon 6 fibers also rose to 55,500 tonnes a year, Yu said.
Prices of nylon 66 fibers have averaged 15 percent to 25 percent higher than nylon 6 fiber because of better resistance to heat and abrasion, Yu said.
Chain Yarn posted revenue of NT$5.51 billion in the first nine months of the year, down 9.74 percent from the same period a year ago, while its profit during the first six months was NT$26.57 million, compared with a loss of NT$93.6 million a year ago, according to the company’s data.
“We chose our product-mix more carefully this year and did not take orders for products with a low profit margin,” Yu said, adding that revenue this year might see a year-on-year decline, but profits will grow.
The company also suffered from losses last year because of low nylon prices and high prices for caprolactam (CPL), the material used to make nylon 6 fibers, but the prices for CPL are more stable this year, Yu said.
Chain Yarn’s shares rose 5.88 percent to NT$9 yesterday in Taipei trading.