NGAI HING HONG AND HAIER GROUP ESTABLISHED JOINT VENTURE
TSINGTAO NGAI HING PLASTIC MATERIALS CO., LTD.
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Assists Ngai Hing Hong in Strengthening Production Business and Aggressively Expanding into the Market of Northern China
(Hong Kong, November 29, 2000) - Leading Hong Kong plastic resins and specialty colourants supplier Ngai Hing Hong Company Limited ("Ngai Hing Hong" / the "Company") (Stock code: 1047) today announced it had reached an agreement with Haier Group ("Haier"), a leading home appliances manufacturer in the PRC, to establish a joint venture to facilitate the business development of both parties.
Ngai Hing Hong entered into a joint venture agreement with Haier Group ("Haier") on October 23, 2000. The initial investment for establishing of the joint venture, Tsingtao Ngai Hing Plastic Materials Co., Ltd. ("Tsingtao Ngai Hing"), is HK$15million. Ngai Hing Hong holds 85% interest of Tsingtao Ngai Hing, while Haier holds the remaining 15%. Tsingtao Ngai Hing is principally engaged in the production and sales of engineering plastics, colour pigment, pre-colour and masterbatches. The annual production volume is estimated to reach 2,100 tons.
Haier Group is a renowned and large state-owned enterprise in the PRC. The introduction of imported refrigerator production technology from Germany in 1984 marked a milestone for the Group which later founded the Qingdao Refrigerator Factory. The business of the Group then expanded rapidly after its breakthrough in implementing the imported technologies. Haier is a reputable brand in the PRC's home appliances industry, with a leadership position in the domestic market. Over the years, it has obtained a number of awards for its quality products and excellent performance. In 1999, Haier ranked the seventh by the Financial Times in the list of outstanding Asian transnational companies, in which it was the only Chinese enterprise in the top ten. Additionally, Haier expands into overseas markets actively. It has established over 3,800 overseas sales points in 90 countries and regions in Europe, America, Middle East, South East Asia, etc.
Mr. Hui Sai Chung, Chairman of Ngai Hing Hong, said, "It is our pleasure to establish a joint venture with Haier Group, which is a well-known and large home appliances manufacturer in the PRC. Plastic is an essential material for the production of Haier's home appliances. Hence, it needs huge volume of colourants in the production process. As Haier produces a great number of home appliances, its demand for colourants is enormous. Through the joint venture, we are able to establish stable and sustainable partnership with Haier. We are confident that the joint venture will generate stable income for Ngai Hing Hong."
The new plant of Tsingtao Ngai Hing will be located at Tsingtao Jiaozhou Haier Industrial Zone, with an area of 7,600 square metre. Construction of the plant will start by the end of this month, and is expected to be completed in February next year. Proximity of the two plants of Tsingtao Ngai Hing and Haier will not only reduce the production cost and enhance the quality control of colourants, but will also provide flexibility in controlling the volumes of production and material supply. Thus, the huge demand for colourants of Haier will be satisfied. As at the end of 1999, Haier had manufactured 9,200 models of home appliances in 58 major categories.
Haier Group said they believed that the cooperation would generate synergies for both Haier and Ngai Hing Hong. Ngai Hing Hong has years of experience in producing colourants, and its masterbatches and pre-colour are well recognized by Haier. With the tremendous growth of Haier's production volume, they hope the joint venture will provide Haier with high quality and reliable colourants in large quantity.
In addition to satisfying Haier's needs for colourants, Ngai Hing Hong treats the joint venture as a foothold in expanding the market of northern China. It also helps to strengthen the production capacity and distribution network of Ngai Hing Hong in the PRC and hence further expanding the Company's client base.
"Colourants are the core elements for producing home appliances. Since Haier has a large market share in domestic home appliances, its increasing demand for colourant will create emerging business opportunities for colourant manufacturers. We strongly believe that this investment will generate promising returns for our Company." concluded Mr. Hui Sai Chung.
Ngai Hing Hong provides a total solution to plastic products manufacturers with services and products ranging from plastic resin (including polymers and engineering plastics) selection, complementary computerized color matching services and on the spot technical advice, to the supply of custom-made plastic colourants for the plastic industry.
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