Guanwei says Fuqing investment 'highly preliminary'

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: May 26, 2014 8:40 am ET
Updated: May 26, 2014 8:44 am ET

Related to this story

Topics China, Recycling

China's Guanwei Recycling Corp., one of the country's largest processors of reclaimed low density polyethylene, responded to a Chinese media report of its signing a document to invest $60 million at its headquarters in Fujian province.

In a May 23 statement, Guanwei said it had no "firm" plans to expand its production facilities, in spite of a report in the Fuzhou Daily, a government-owned newspaper in Fuzhou, capital city of Fujian province, that it had signed an agreement May 17 with local officials to make the investment.

The paper said half the $60 million would be foreign investment, without providing more details.

But Guanwei, which is traded on the NASDAQ stock exchange in the United States, said in the statement that it had only signed a preliminary, non-binding agreement with the local government in Fuqing city, Fujian, where it is headquartered.

"'The company … believes this actually refers to a non-binding letter of intent it recently signed with the local government in Fuqing which normally it would not wish to or be required to disclose given its non-binding, highly preliminary nature," Guanwei said.

"There are no firm plans in place to expand its production facilities in current market conditions," the company said. "Any such expansion would certainly be announced to shareholders on a timely basis."

Guanwei's statement did not say why it signed the letter of intent and it did not explicitly say the Fuzhou Daily report was false.

In a May 15 earnings report, the company said its first quarter sales shrank 20 percent year-on-year to $11.8 million and net profit contracted by two-thirds to $750,000.

It blamed a worse-than-expected slump in demand, higher costs from the country's Green Fence environmental crackdown and labor shortages. Its stock price has dropped 60 percent since mid-March.


Comments

Guanwei says Fuqing investment 'highly preliminary'

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: May 26, 2014 8:40 am ET
Updated: May 26, 2014 8:44 am ET

Post Your Comments


Back to story


More stories

Image

Hong Kong's TK eyes expansion, may buy Nypro Tool operation

September 19, 2014 2:49 pm ET

Hong Kong-based mold maker and plastics processor TK Group (Holdings) Ltd. said it's reached a tentative agreement to buy a tooling factory in...    More

Image

3-D printing specialist aims at better materials, faster equipment

September 19, 2014 2:07 pm ET

An exception in the crowded field of boutique vendors and agents at this year's AsiaMold show was Changsha-based Hunan Farsoon Hi-tech Co. Ltd.,...    More

Image

Smartphone work adds 52 percent to sales for China's Eva Precision

September 18, 2014 4:37 pm ET

Growth in supplying the smartphone and automotive industries helped Chinese processor Eva Precision Holdings Ltd. push injection molding sales up 52...    More

Image

PET to PET boosts recycling capacity

September 18, 2014 11:14 am ET

PET to PET Recycling Austria GmbH, a bottle-to-bottle PET recycling operation backed by Coca-Cola Hellenic Bottling and several beverage...    More

Image

China's Polymax Elastomer launches U.S. production in Illinois

September 17, 2014 3:35 pm ET

Chinese materials maker Polymax Elastomer Technology Co. Ltd. has opened a North American production site and headquarters in Waukegan, Ill.    More

Market Reports

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Thermoformed Packaging 2014 Market Review & Outlook – North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events