Papermaking conglomerate YFY Inc (永豐餘控股) yesterday said a new machine to produce industrial-use paper at its plant in Taoyuan’s Sinwu District (新屋) is to start production by the end of this quarter.
“The machine for making core paper, which was previously scheduled to begin operation in the fourth quarter of last year, has started trial operations,” YFY spokesman Yin Kuo-tang (殷國堂) said by telephone.
The new machine, which has an annual capacity of 300,000 tonnes, is expected to raise YFY’s domestic industrial-use paper capacity to 750,000 tonnes annually, a 7.45 percent increase from its current 698,000 tonnes, the company said.
A cogeneration system will also be built at the Xinwu plant to help reduce material costs generated during the papermaking process.
The capacity expansion project cost YFY nearly NT$4 billion (US$131.7 million), according to a company filing with the Taiwan Stock Exchange.
Last year was difficult for YFY, which also has household paper and specialty paper divisions, because of mounting foreign-exchange losses and ongoing reconstruction plans for its industrial-paper segment.
Net profit plunged 74.9 percent to NT$126 million last year from NT$502 million a year ago, or earnings of NT$0.08 from NT$0.03, company data showed.
The foreign-exchange losses reached nearly NT$796 million last year, mainly due to the appreciation of the New Taiwan dollar against yuan and the US dollar, the company said in a statement.
Despite last year’s performance, YFY gave a positive business outlook, saying that it expects sales and net profit to improve significantly this year.
The forecast came after it reported a better-than-expected sales of NT$16.95 billion for the fourth quarter of last year, an 8.9 percent rise from the previous quarter and a 3.3 percent increase from the same period in 2015.
YFY attributed the pick up to soaring international pulp prices and robust demand for household paper products.
Pulp and industrial-use paper remained its main sources of revenue last year, taking up 39 percent and 34 percent of total sales respectively, while household paper products accounted for 19 percent.
YFY’s board decided not to distribute a dividend this year, the company’s filing said.
YFY shares yesterday rose 2.16 percent to NT$$11.8 in Taipei trading, beating the benchmark TAIEX, which increased 1.41 percent to 9,949.48 points.
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