Tile producer Champion Building Materials Co (冠軍建材) said it is conservative about business this quarter, adding that it would conduct annual maintenance of its manufacturing facilities during the traditionally slow quarter.
The maintenance would affect its operations and financial performance, but would not affect its plan to gain market share in Taiwan, the Miaoli County-based company said.
Champion said it would adjust its product portfolio, improve tile paving methods and upgrade its sales channels in line with an ongoing business model adjustment.
It would also implement inventory management and internal cost control measures to stay competitive in the building materials sector and bolster its earnings ability, the company said.
Champion last month posted a decline in revenue of 7.2 percent to NT$232 million (US$7.64 million), as labor shortages led to the postponement of deliveries worth millions of New Taiwan dollars to this quarter.
Revenue for the fourth quarter of last year picked up 2.75 percent from three months earlier to NT$723 million after business at its Chinese subsidiary became a joint venture dominated by the Chinese partner.
Champion has limited its role as a pure tile supplier with a 43.46 percent stake in the joint venture and yielded the management right to the Chinese partner, which owns a 54.54 percent stake in its former subsidiary.
CHINA SALES DROP
Sales in China, once Champion’s main revenue driver, dropped significantly and would shrink further, as the company is seeking to focus on the domestic market, it said.
The change in strategy, induced by rising competition and a shrinking profit margin in China, enabled Champion to cut operation and personnel costs, but led to a 6.69 percent drop in overall sales to NT$43.01 billion last year, the company said, adding that it now lists income from its business in China as a non-core contributor to its overall income.
Champion has sought to boost its presence in Taiwan by offering a new and diversified product mix and expanding its sales channels to include retailers and construction projects.
Renovation and decoration demand underpinned the mild increase in fourth-quarter revenue, Champion said.
Although property transaction figures showed signs of a slowdown in the second half of last year, presale and new construction projects totaled a record NT$1.96 trillion for the entire year, suggesting hefty business potential for building materials, it said.
The total was about 10 percent higher than in 2021, reflecting business confidence on the part of developers and builders, Champion said.
The company said it would take advantage of real housing demand and seek to entice customers with reliable high-quality products, it said, adding that Taiwan accounts for 30 percent of its tile shipments.
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