ERJ staff report (DS)
Hong Kong, China -- Chinese steelcord maker, Xingda International Holdings Ltd, said profits increased sharply on higher sales in the 12 months to December 2007. The Group is an independent manufacturer of steelcord and bead wire and sells its products to both domestic and international tyre manufacturers. ERJ estimates it is second only to Bekaert in terms of Steelcord production.
The Hong Kong-listed company reported sales of RMB 2778 million (Euro 253 million), up from RMB 2516 million a year ago. Pre-tax profit was RMB 513 million (Euro 46.6 million), up by 48 percent from the RMB 345 million reported a year ago.
In 2007, the Group's total sales volume grew to 234 400 tonnes, 20.8 percent more than that in 2006. During the year, the Group's steelcord sales achieved an 18.7 percent increase in sales volume to 198 200 tonnes, accounting for 84.6 percent of the Group's total sales volume (2006: 86.1 percent). Sales volume of bead wire rose by 34.1 percent to 36 200 tonnes, accounting for 15.4 percent of the Group's total sales volume (2006: 13.9 percent).
During the year, the Group sold 162 300 tonnes of steel cords for truck, up by 21.2 percent against the previous year. The sales volume of steelcord for passenger car also increased by 8.5 percent, to 35 900 tonnes. Sales volumes of r steelcord for truck and passenger car accounted for 81.9 percent and 18.1 percent of the Group's total sales volume of steelcord (2006: 80.2 percent and 19.8 percent), respectively.
During the year under review, China remained the Group's major market. Domestic sales volume of steelcord increased by 19.0 percent to 196,000 tonnes, accounting for 98.9 percent of the Group's total volume of steelcord sold (2006: 95.0 percent). In 2007, the Group secured several new overseas customers and expects overseas sales portion to increase gradually.
With the completion of Phase I of the Group's No. 8 Factory (â€œFactory No.8â€), the Group's production capacity of steelcord was boosted to 237,100 tonnes by the end of 2007, representing an increase of 22.2 percent compared with last year. The production capacity of bead wire remained at 39 000 tonnes for both 2006 and 2007. The utilization rate of steelcord maintained at about 84 percent in 2007 (2006:85 percent).
Riding on the strong and growing domestic demand, the Group will speed up expansion of Factory No. 8 targeting to increase the annual production capacity for high performance steelcord by 40 000 to 50 000 tonnes a year in each of the next three years, reaching a total steelcord production capacity of approximately 400 000 tonnes by 2011.
In its annual statement, Xingda said, "According to the China Rubber Industry Association, the country's total tyre output in 2007 rose by 18 percent year-on-year to 330 million units of which 230 million units were radia, representing a rise of 28 percent against previous year. Positive effects brought from structural adjustment of China-made tyres have so far achieved a radialisation rate of around 70 percent. In addition, demand for radial tyres from the global market has been surging. The country exported more than 141 million units during the year, representing a 27 percent growth against the previous year." It continued, "According to the forecasts of the China Rubber Industry Association and other authoritative organizations, the demand for steelcord in China will exceed 800,000 tonnes in 2008, an increase of over 25% when compared with 2007. Capitalizing on the Group's leadership in the steelcord industry in China, the Group is confident of delivering better financial results and better returns to the shareholders of the Company in the future."
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Press release from Xingda