Wed, Nov 08, 2017 - Page 12 News List

Swancor forecasts increase in resin business in China

By Kuo Chia-erh  /  Staff reporter

Materials manufacturer and wind farm developer Swancor Holding Co Ltd (上緯) yesterday forecast that its turbine blade resin business in China would pick up next year, aided by increasing orders from its largest client in that market.

Chinese clients accounted for 76 percent of the Nantou County-based firm’s revenue last quarter, company data showed.

Swancor counts Goldwind Science and Technology Co (金風科技), China’s largest wind turbine manufacturer, among its top clients.

Swancor aims to secure a 25 percent share of Goldwind’s resin orders next year, compared with the current 13 percent, Swancor chairman Robert Tsai (蔡朝陽) told an investors’ conference, adding that Swancor has obtained Goldwind’s new certification this year.

In 2015, Swancor was one of the most important resin suppliers to Goldwind with a 58 percent share. However, the firm’s share last year slid to 22 percent, as it did not pass a certification test.

Apart from Goldwind, the resin maker said it would begin distributing its products to another Chinese wind turbine manufacturer in the first quarter of next year at the earliest, in a bid to diversify its operating risk.

It is also likely to secure orders for turbine resins from the US and India next year, it said, without elaborating.

Tsai also outlined the firm’s near-term expansion plan for its anti-corrosion materials business, which has a focus on Asian markets, including China and Malaysia.

Swancor’s new plant with an annual capacity of nearly 15,000 tonnes in China’s Jiangsu Province began production in September, he said.

The second phase of construction at the plant is to start in the first quarter of next year, lifting Swancor’s annual anti-corrosion material capacity in China to 40,000 tonnes, Tsai said.

The firm is also working on building a new plant in Malaysia, which it said would start production in the second half of next year.

Swancor is expanding its footprint in Malaysia, as it hopes to take advantage of potential zero-tariff treatment due to free-trade agreements among ASEAN members.

Swancor revenue last quarter totaled NT$1.33 billion (US$44.1 million), a 2 percent increase from NT$1.3 billion a year earlier, company data showed.

However, net income dropped 28 percent year-on-year from NT$54 million to NT$39 million, with gross margin falling from 27.5 percent to 21.2 percent, the data showed.

Swancor attributed the significant decline in profitability to soaring raw material prices in the Chinese market due to Beijing’s tighter controls on chemicals makers.

Swancor shares yesterday fell 0.67 percent to NT$74 in Taipei trading before the conference, underperforming the TAIEX, which gained 0.5 percent to 10,840.34 points.

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