Kingfa Science & Technology Co. Ltd. has been on an investment spree, eyeing a lot more than just capacity expansion.
The Guangzhou, China-based company is forging further into inland China to build yet another production base, but it's investing even more in areas outside of traditional materials manufacturing and distribution.
Kingfa announced June 9 that it plans to build a new site in Chengdu, Sichuan province, for manufacturing as well as R&D. It has tentatively decided to fund the new wholly owned subsidiary with registered capital of 500 million yuan ($80.4 million).
The investment will help Kingfa increase its coverage of West China, broaden its revenue sources, enable sustained and stable growth, and strengthen profitability and competitiveness, the company said in a June 6 filing.
Earlier this year, Kingfa also broke ground on its Wuhan production base in Central China.
Kingfa's latest move in Sichuan marks a step forward after the company merged two subsidiaries in Mianyang, Sichuan province, in July. The new unit, named Sichuan Kingfa, reported annual output of 89,000 metric tons last year.
But the largest Chinese plastics compounder also is aggressively moving into new sectors, including supply chain and finance.
On June 4 Kingfa unveiled plans to invest 1.5 billion yuan ($241.4 million) for 30 percent stake in a proposed joint venture to establish a privately owned bank in Guangzhou. As the main founder of the project, Kingfa said it aims to seize huge growth opportunities at a historic time of China's financial reform.
Kingfa said it hopes to establish a financial service ecosystem, provide multi-channel financial services, integrate with its existing competitive advantages and resources, and promote integrated development of financial capital and industrial capital.
Specifically, Kingfa expects the bank to broaden its financing channels, leverage available resources, extend value chain, and foster new growth points.
In March, Kingfa formed a new supply chain management subsidiary in Zhuhai. The new unit could help Kingfa lower raw material sourcing costs as well as offer supply chain management services to diversify its business. It also mentioned the local government's policy incentive as a factor in the new venture.