M.J. International Co Ltd (美喆) plans to triple or quadruple its production capacity in the second half of this year to meet growing demand for luxury vinyl tile (LVT) and stone plastic composite (SPC) floorings.
“We expect to add four production lines to the two lines already at our factories in Dongguan, China, in September,” James Yang (楊儒霖) told a media gathering in Taipei on Monday.
The company is having difficulty keeping up with the demand for SPC floorings, Yang said, adding that even after utilizing its production lines in Dongguan at 100 percent over the past six months, the company’s production schedule is still full for the next three months.
SPC floorings, which have a higher margin than other products, made up 5.3 percent of first-quarter sales, while LVT floorings accounted for most of the rest.
“An increase in sales of SPC floorings will not lower our sales of LVT floorings, as SPC floorings are intended to replace composite wood floorings in the market and ease consumer concerns over formaldehyde,” Yang said.
SPC floorings are environmentally friendly, toxic-free and more durable, and the prices are less than half those of composite wood floorings, at about NT$3,000 per ping (3.31m2), Yang said.
The company started selling floorings with hexagonal patterns in the first quarter and expects higher-margin SPC and hexagonal floorings to contribute more than 6 percent of sales in the second half of this year, it said.
With the high utilization rate, modest foreign-exchange gains and stable prices for raw materials, the company’s gross margin in the second half of this year is expected to surpass the 26.51 percent seen in the first quarter, analysts said, forecasting that the company’s cumulative sales split will be 45-55 this year.
M.J. International reported that revenue for last month increased 29.11 percent year-on-year to NT$310.68 million (US$9.96 million), with cumulative sales for the first six months of the year soaring 25.14 percent to NT$1.78 billion.
Sales in the US fell to less than 14 percent of total sales in the first half of this year from 21 percent in the same period last year, due to Washington’s 25 percent tariffs on Chinese floorings, Yang said.
However, the company is encouraged by growing markets in Europe and Canada, as well as the growth potential in China, he said.
In Taiwan, most McDonald’s outlets have been replacing their old tile floorings with the company’s LVT flooring, creating steady sales growth in the coming years, Yang added.
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