Compounder Ngai Hing Hong Co. Ltd. is postponing construction of a new engineering plastics plant in Shanghai, as the Hong Kong-based company looks to turn around a loss-making first half of its fiscal year.
In a March 24 report to the Hong Kong Stock Exchange, the company said tough economic conditions pushed sales down 15 percent to HK$667.8 million (US$86.2 million) in the six months ending Dec. 31, as it reported a loss of HK$24.6 million (US$3.17 million) in the period compared with a profit of HK$13.1 million (US$1.69 million) a year earlier.
But NHH added that it would have posted a profit, if not for losses on investment properties and forward-valued contracts. The company said it sees opportunities as competitors in mainland China are hurt by the economic downturn.
The firm said it would try to expand in China's growing automobile market, and said its factory in Hong Kong's Tai Po District is starting to see tariff benefits from the Closer Economic Partnership Agreement between Hong Kong and mainland China. The company also said that it was moving some work from the mainland to Tai Po.
NHH said its engineering plastics division had the strongest performance, while its trading business was hit hardest, and its colorants and compounded resins business saw a drop in turnover but only a minor loss.
Director Anthony Wong said in a March 26 telephone interview that NHH has seen a modest uptick in business since the begiining of 2009. He said that the company's customers who focus on the Chinese market are faring reasonably well, while those in export businesses have been hit hard.
Wong said the group continues to devote resources to researching future growth areas like biodegradable plastics.
The company has reduced its workforce from about 820 in mid-2008 to 690 at the end of the year, he said.