Plastic additives maker Double Bond Chemical Ind Co Ltd (雙鍵) yesterday said that operations at its factory in Dafeng, China, remained halted after a chemical plant explosion in March, while its factory in Yilan County might start operations in the fourth quarter of this year.
Double Bond spokesperson Yu Hui-ling (余慧玲) said that its Dafeng unit in Jiangsu Province last year contributed 35 percent of overall revenue, with sales of NT$1.59 billion (US$50.3 million).
The unit has an annual output of about 5,000 tonnes, mostly ultraviolet (UV) curing materials used in the assembly of circuit boards, as coating for Tetra packs and in dental care.
However, the shutdown has seen revenue for the first four months of this year fall 19.12 percent to NT$1.24 billion from a year earlier.
The company has been outsourcing and adjusting its inventory to meet demand.
“We hope that the Dafeng unit can restart operations as soon as possible to help profits this year,” Yu told an investors’ meeting in Taipei, adding that gross margin might be lower due to a higher outsourcing ratio.
About 65 percent of last year’s sales were from outsourced operations, Yu said.
Double Bond vice president Chen Chung-ping (陳仲平) said that prices for UV curing material have improved and would remain high in the second half of the year.
Prices for plastic additives are relatively stable, Chen said.
The company plans to apply for an operating license for its factory at the Letzer Industrial Park (利澤工業區) in Yilan in the fourth quarter, it said.
The Yilan unit is expected to generate NT$920 million in annual output and contribute about NT$120 million in income on annual output of 5,000 tonnes, the company said.
Plastic additives, used for extending the service life of plastic products, last year made up 48 percent of sales, while UV curing materials accounted for 44 percent, company data showed. Electronic materials and digital printing inks contributed the remaining 8 percent.
First-quarter net income dropped 19.78 percent to NT$85.38 million from a year earlier, while earnings per share decreased to NT$1.22. Gross margin slightly softened to 26.04 percent.
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