Rising costs in China and government attempts to rein in growth do not seem to have dented the country's largest press maker, Haitian International Holdings Ltd., which said sales and profit grew more than 20 percent in 2007.
The Ningbo, China-based firm said demand for medium- and large-tonnage presses, and for energy-saving models it has introduced, pushed sales to 3.82 billion yuan (US$546.3 million) in 2007, up 20.4 percent, while operating profit hit 575.8 million yuan (US$82.4 million), up 22.5 percent.
That contrasts somewhat with other publicly traded Chinese injection press makers, including Hong Kong-based Chen Hsong Holdings Ltd. Those firms' financial data lately have pointed to a tightening of capital spending as molders get hit with rising labor and raw-material costs, product recalls and economic troubles in the U.S. market.
``Our ability to achieve such results in [the] emerging unfavorable market environment, especially with regard to the increase of raw-material cost ... once again evidences the correctness of our strategy,'' said Zhang Jianming, Haitian chief executive officer and executive director.
He said the company's gross profit margin increased 1.2 percent points in 2007, to 29.3 percent, as Haitian increased market share in large-tonnage, environmentally friendly and precision injection presses, and put cost-saving measures into place.
Haitian also said international sales grew 31 percent in 2007, compared with 17.7 percent in domestic Chinese sales, with growth in India, Brazil and Poland; and in mature markets in Europe and the United States, where it said sales doubled from a relatively small base.
The more difficult market in the second half of the year did slow sales, however, as factors such as the Chinese government's lowering of value-added tax rebates and the country's new labor law increased costs, the company said.
Smaller companies focused on export markets were particularly hard hit, but sales of larger-tonnage presses grew, as did sales to companies focused on China's domestic market, according to Haitian.
The fundamentals of the industry remain strong, and steady growth is expected in 2008 because of growth in investment in China and rising per-capita income there, Haitian said.
The company sold about 19,000 presses in 2007.
The company confirmed in the financial filing that it is building new factories in Guangzhou, China, and in Ningbo, as Plastics News previously reported during K 2007 in Dusseldorf.
Haitian said in a March 25 statement that a new, 1.3 million-square-foot Ningbo factory will start operating in 2008, while the 377,000-square-foot plant under construction in Guangzhou is expected to launch in 2009.