 2004-08-13 |
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Reported by Liang-Hsing Tseng, Taipei
Chairman and CEO Lee Chih-Hsien of YC (4306) announced yesterday that YC’s '333 Growth Plan,' set at the beginning of last year, is now complete. The consolidated revenue from Taiwan, China, and Vietnam companies is projected to reach between NT$4.5 billion and NT$5 billion this year, representing a 50% growth compared to the previous year.
Lee explained that the '333 Plan' involves three key components. The first '3' signifies the establishment of three companies under the group umbrella: YC Taiwan, Ningbo Asia Plastic in China, and Vietnam Wanli. The second '3' refers to three main products—films, resins, and tapes. The final '3' represents production bases in Taiwan, China, and Vietnam. With Taiwan's new BOPA (biaxially-oriented nylon film) production line completed last month, the '333 Plan' has reached a significant milestone, and now the focus will be on assessing its impact. Given the current industry climate and order volumes, Lee estimates that the combined revenue from YC’s companies in Taiwan and abroad will reach between NT$4.5 billion and NT$5 billion this year, with expectations to exceed NT$5 billion next year.
Notably, the previously loss-making Ningbo Asia Plastic achieved profitability in June, with a monthly profit of NT$6 million in July. Vietnam Wanli also shifted from loss to profit in July, reporting NT$1 million in profit for the month.
This year, YC’s revenue is expected to challenge the NT$5 billion mark, and as overseas investments continue to pay off, the forecasted after-tax EPS is NT$1.95. Petrochemical raw materials prices surged this year, yet YC has maintained high profitability despite the high costs of polypropylene (PP) and nylon 6 for film production. This success is largely due to the high margins associated with BOPA products, with the BOPP market conditions in H2 projected to be stronger than in H1.
Among YC's product lines, tapes have shown weaker profitability, but YC remains the sole producer of BOPA on both sides of the Taiwan Strait. The considerable NT$600 million investment required for BOPA production equipment is often unfeasible for smaller companies, while larger firms find the market size too limited to pursue. Nan Ya Plastics (1303), for example, has the technology and capacity to produce BOPA, but Taiwan’s annual domestic demand is only 2,500 tons. YC's single production facility is already sufficient to meet market supply, making this small market less attractive to larger players like Nan Ya.
YC's new BOPA plant, located in Changhua's Changbin Industrial Park, has a monthly production capacity of 400 tons, with plans to distribute half domestically and half for export. Production has already reached 200 tons this month, and as capacity utilization rises, the plant is expected to turn profitable by next month. |
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