CHINA / Taiwan, HK, Macao |
Norstar to focus on domestic market(China Daily HK Edition)Updated: 2006-11-17 08:54 China's major auto-parts maker and seller Norstar hopes to increase its mainland turnover growth from about 12 per cent to more than 30 per cent in three to five years, company CEO Zhou Tianbao said yesterday. "There is an increasing demand for auto parts in China and therefore we are confident about generating more revenue from the domestic market, Tianbao said. As an export-oriented company, Norstar used to generate its revenue mainly from exports to the United States, Canada and Europe. But galvanized by the robust growth of the mainland's auto industry, Norstar's revenue from the domestic market grew to 12 per cent in the first half of 2006-07. It's year-on-year growth in the last fiscal year was zero. "We expect our revenue from the mainland to remain around 12 per cent in the second half," Zhou said, as Norstar announced its results yesterday. The Anhui-based auto-parts giant posted a net earning of 192.79 million yuan (US$24 million) in the first half, up 11.2 per cent from 173.35 million yuan (US$21.6 million) in the previous year. The company's total turnover was 1.63 billion yuan (US$203 million), a year-on-year increase of 30.9 per cent. Auto-parts business still accounted for the lion's share, or 89 per cent, of Norstar's total turnover, generating 1.45 billion yuan (US$181 million). Norstar will expand its production capacity to cope with the mounting demand for its products and to increase its profit margin, Zhou said. "We expect our production capacity for suspension systems and axle modules to reach 200,000 sets by the end of 2007-08... followed by 400,000 sets by 2010-11." The company is planning to invest about 1 billion yuan (US$125 million) to set up a plant in Beijing and another in Anhui to make more suspension systems, axle modules and core parts for suspension systems and shock absorbers. "We estimate our capital expenditure (capex) in 2006-07 to be about 250 million yuan (US$31.25 million)... For the next fiscal year, it will reach 400-500 million yuan... (US$50-62.5 million), most of which will be used to build our new plants in Beijing and Shanghai," Norstar's financial controller Elina Fung said. "We have enough funds to support the company's operation." Norstar had net cash of 590 million yuan (US$73.75 million) at its disposal in September. |
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