YFY Inc (永豐餘), which makes paper pulp and various paper products, said yesterday that the company will build four more machines on both sides of the Strait within the next two years, increasing its capacity by 381,000 tonnes a year.
A machine to produce household-use paper with a capacity of 36,000 tonnes a year in Greater Taichung’s Qingshui District (清水) and another machine for the same product with a capacity of 22,500 tonnes a year in China’s Guangdong Province will be operational in the fourth quarter of next year, YFY spokesman Yin Kuo-tang (殷國堂) told investors yesterday.
As for 2016, a machine to produce household-use paper with a capacity of 22,500 tonnes a year in Guangdong, China, will be operational in the first quarter, while another machine to produce industrial-use paper with a capacity of 300,000 tonnes a year in Sinwu Township (新屋), Taoyuan County, will be operational in the third quarter, Yin said.
The firm spent NT$7.3 billion (US$235.73 million) to set up the four machines, Yin said.
Currently, the company can make 977 million tonnes of paper pulp, 1.66 billion tonnes of industrial-use paper and 219 million tonnes of household-use paper a year, according to the company.
From January through last month, the company posted revenue of NT$44.43 billion, up 5 percent from NT$42.11 billion a year ago, according to a company filing with the Taiwan Stock Exchange.
Sales for the company’s paper business will rise this year compared with a year ago as a result of expanded capacity in Yangzhou in China’s Jiangsu Province, Yin said.
However, the company posted losses for industrial-use paper and paper-made products in the past three quarters because the utilization rate of its new machine in Yangzhou was still low and sales in eastern China dropped after a number of electronics companies moved to western China following a Chinese government mandate, Yin said.
Yin said the profit decline was a regional phenomenon, and that sales and profit in northern and southern China were still growing.
“In general, sales of consumer products in China are still on the rise, including our household-use paper,” Yin said.
Roughly 33 percent of YFY Inc’s paper business sales were in China in the past three quarters, while 61.4 percent of sales were in Taiwan, the company said.
Meanwhile, Chung Hwa Pulp Corp (中華紙漿), a YFY subsidiary which makes pulp and paper products, said yesterday it would return to the black this quarter with a pre-tax profit of about NT$90 million, up from losses of NT$44.87 million, or NT$0.04 per share, the previous quarter, due to rising pulp prices and the company’s efforts to cut costs.
The fourth quarter of the year is the peak season for the paper industry as demand rises, the company said.
Chung Hwa Pulp spokesman Gu-feng (林谷豐) told investors yesterday that the company’s pulp business would break even this quarter while profit for its paper-made product business grows.
Gross profit for its paper-made products would rise to NT$480 million, up from NT$364.55 million the previous quarter, Lin said.
About 28 percent of the company’s paper products were specialty products last quarter and the company aims to raise that to 30 percent next year to raise its gross margin, Lin said.
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