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.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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