Nylon makers Li Peng Enterprise Co (力鵬) and Zig Sheng Industrial Co (集盛實業) yesterday reported quarterly revenue growth of 3.6 percent and 6.31 percent respectively for last quarter as downstream companies increased their procurement amid expectations of future price increases.
Last quarter, Li Peng, the nation’s largest nylon maker, posted revenue of NT$6.73 billion (US$22.38 million), up from NT$6.5 billion the previous quarter, according to a company filing to the Taiwan Stock Exchange.
The figure last quarter was 8.9 percent higher than the NT$6.18 billion posted the previous year, the filing said.
“Our factories will operate at full capacity this month because of rising orders,” said Chang Ta-chuan (張大銓), assistant vice president of Lealea Group (力麗集團), a subsidiary of Li Peng.
Chang said the company’s sales this quarter would be slightly affected by the Lunar New Year holiday, but that he is still optimistic.
“Nylon production around the world is expected to rise less rapidly this year,” he said, adding that the company would have higher margins because of the quality of its products and its bargaining power to buy materials as prices get cheaper.
The company is set on Thursday next week to break ground on its new nylon production line, in which it invested NT$2 billion, Chang said.
The production line is expected to increase its capacity by 180,000 tonnes a year starting in the first quarter of next year, the company said.
Li Peng shares dropped 4.1 percent to close at NT$14.05 yesterday, underperforming the TAIEX, which was down 0.48 percent.
However, Chang was less optimistic about the prospects for Lealea Enterprise Co (力麗), another company under the group which makes polyester yarns.
“Our sales volume will rise this year, but margins on polyester products are expected to be lower because of oversupply in China,” Chang said.
Lealea Enterprise posted revenue of NT$2.96 billion last quarter, down 3.58 percent from NT$3.07 billion the previous quarter and up 6.86 percent from NT$2.77 billion the previous year, according to the filing.
Lealea Enterprise shares remained unchanged to close at NT$10.95 yesterday.
Meanwhile, Zig Sheng, the nation’s second-largest nylon maker, yesterday posted revenue of NT$5.06 billion for last quarter, up from NT$4.76 billion the previous quarter.
The company said the figure was 26.18 percent higher than the NT$4.01 billion recorded the previous year, the company said.
Zig Sheng Industrial shares declined 0.96 percent to close at NT$10.35 yesterday.