Foshan Plastics, BYD to increase investment in JV

Oct. 22, 2009 (China Knowledge) - Foshan Plastics Group Co Ltd<000973>, a plastic product producer located in Foshan, Guangdong Province, yesterday announced that it and BYD Co Ltd<1211> will inject a total of US$5.24 million into a joint venture called Foshan Jinhui Hi-tech Optoelectronic Material Co Ltd for investment in a RMB 105-million plant that will produce membranes for Lithium-ion batteries.

The Shenzhen-listed firm, which holds a 55% stake in the joint venture, intends to invest US$2.89 million, while BYD, which holds a 45% stake, will contribute US$2.36 million.

In addition, the senior officers and major technicians of the JV will set up a management firm, which will invest US$1.88 million in the JV to become a new shareholder. However, the statement did not disclose the new share proportion after the investment.

The plant, which will be completed in 18 months, will have an annual output of 45 million cubic meters or 542 tons. It will generate an estimated RMB 229.03 million in sales revenue every year, and after-tax profit will be RMB 62.5 million.

Reportedly, Foshan Plastics Group is selling three commercial properties in Chancheng District, Foshan. The properties, which cover a land area of 176.59 Mu or 1.18 million square meters, had a book value of RMB 40.6 million in total as of Sep. 30.