Nasdaq-listed plastic tableware manufacturer Fuling Global Inc. has acquired land near its current headquarters in Wenling, China, and expects to break ground on its newest factory in June.
The land investment includes $8.27 million for 50-year land-use rights for the 32.86-acre parcel, $250,000 for taxes, a $930,000 refundable security deposit and $790,000 for supporting infrastructure.
The expansion is funded with a portion of the proceeds from the company's November 2015 IPO, when Fuling raised a total of $20 million. At the time, Fuling said it would spend $9.5 million to build its fourth factory in China, more than $7 million to expand its factory in Allentown, Pa., and to build its U.S. sales network.
The company, one of the largest disposable tableware exporters in China, said the new factory will start production in the first quarter of 2017.
Fuling is currently operating near full capacity, but sales volume continues to grow, said CEO Xinfu Hu.
“We look forward to starting a new chapter of the company with the planned Wenling factory that can bring additional annual production capacity of 10,000 tons in Phase 1. This new capacity, combined with the continuing expansion of our Allentown factory in the U.S., positions us well for growth in years to come,” he said.
Fuling makes disposable cutlery, drinking straws, cups, plates and other plastic products for more than 100 customers primarily in the United States including Subway, Wendy's, Burger King, and Wal-Mart.
In its latest financial filing, Fuling said its net profit in the third quarter of 2015 rose 17 percent year-over-year to $2.7 million, thanks to falling resin prices, which also caused sales to drop 3 percent despite a volume increase. The company also posted a 38.1 percent gross margin and a 12.1 percent operating margin for that reporting period.
For the first nine months of 2015, 85.9 percent of Fuling's sales was generated in the United States, 9.1 percent in Europe, 1.4 percent in Middle East and Canada, respectively, and just 0.6 percent in China.