Haitian International Holdings Ltd., China's largest injection press maker, reported record-setting sales and profit in the first half of 2010, fueled by strong demand in China and growth in emerging markets like Brazil, the Middle East and Asia.
The firm reported that first-half sales hit 3.23 billion yuan ($477 million) with net profit of 542 million yuan ($80 million), and said it plans to build another press manufacturing factory, this time in the northern China city of Dalian, slated to open in 2012.
The figures suggest Haitian was able to maintain its strong performance from the second half of 2009, its previous record six-month period, as the Chinese economy continued to expand. Haitian said both sales and profits were up 30 percent thus far in 2010 over the previous high.
Whether the firm can keep that up, company officials were unsure and somewhat cautious regarding the impact of the withdrawal of government stimulus spending around the world and the European debt crisis.
But at an Aug. 26 news conference in Hong Kong, Haitian executives struck a bullish tone, saying that based on orders, it looked like the firm's third quarter would maintain the pace.
Looking to the second half of this year and beyond, we are confident that China's [plastic injection molding machine] market will continue to enjoy healthy growth on the back of the sound economic development of the [People's Republic of China], the company said. It added that demand from building materials, home appliance and automobile markets remains solid in the country.
Sales in the domestic China market in the first half of the year were 76 percent above the pre-crisis peak of 1.34 billion yuan ($198 million), in the first half of 2008, the executives said. About 70 percent of Haitian's sales are within China.
While company officials acknowledged they are benefiting from China's overall economic growth, they said that the financial crisis eliminated many of their weaker competitors. They said they are also reaping benefits from decisions several years ago to focus research and development on energy-saving machines, such as its Mars series.
Chinese government policy now is very focused on energy efficiency, and that has forced firms to upgrade equipment, said Helmar Franz, executive director.
The most help to us is this really strengthened [Chinese] government policy toward energy savings, he said. They will just close down companies. They have selected companies [in Ningbo, where Haitian is based] and they just won't get the power. This is a big push for us.
Haitian said its energy savings Mars series grew to 65 percent of overall sales, up from 40 percent in the first half of 2009, as a result.
The company said it is producing a faster version of its Mars machines, the Pallas series, and said sales of its all-electrics Venus machines, made in both Ningbo and at its Zhafir subsidiary in Germany, nearly doubled in the first half of the year compared with all of 2009.
The Zhafir subsidiary also plans to introduce its new Mercury series machines at the K 2010 Fair in Dusseldorf, Germany, in October, as it tries to move into more expensive and more sophisticated machines.
Export sales also returned to pre-crisis levels for the first time, led by emerging economies, the firm said.
Haitian's exports hit a historic high of 792.3 million yuan ($117 million), 17 percent above the previous high before the global economic crisis, with growth in particular coming from Brazil, where the firm has an assembly plant; the Middle East including Iraq, other Asian markets, and Africa, Franz said.
The company said it remains on track to open its new Vietnam plant in first half of 2011, with a capacity to produce about 1,000 machines a year, initially also selling to neighboring countries like Indonesia and Thailand, said Haitian CEO Zhang Jianming.
There's space available to double the size of the Vietnam plant if needed, the company said.
It also plans to open the Dalian plant in 2012, although details such as capacity are still being drawn up, Franz said: The market is there.
Zhang said the firm's strong presence in China it estimated it had about 35 percent of the domestic market last year makes it feel confident in future growth. The company said it made about 18,000 machines in 2009.