Merger of YFY and Chung Hwa Pulp Helps Boost Mutual Revenues

Taipei, Sep12, 2012 (CENS)--Yuen Foong Yu Paper Mfg. Co., Ltd. (YFY), Taiwan's paper-product manufacturer, will merge its fine paper& board division into Chung Hwa Pulp Corp. (CHP) in October 2012, helping YFY to realize higher revenues and profits from CHP, with YFY and CHP expected to post combined revenues of NT$60 billion (US$2 billion) and NT$20 billion (US$666.67 million), respectively, in 2013.

A representative of YFY says the post-merged firm will transform into a holding company, to increase sales of special papers and decrease cost of forest-pulp-paper integration, to achieve approx. NT$350~400 million (US$11.67~13.33 million) in economy-of-scale benefit.

An institutional investor says after the merger, YFY will achieve NT$5 billion (US$166.67 million) in revenues and hold 55% stake in CHP, helping YFY to post 2013 revenues exceeding NT$60 billion (US$US$2 billion) and lead domestic paper-manufacturing.

YFY saw its paper-making business grow nearly 40% to NT$1.155 billion (US$38.5 million) in the first half, with a 40% profit decline due to shrinking profit from CHP and E Ink Holdings, an affiliate of YFY.

The merger to be completed in October will see YFY's fine paper& board division join CHP. In 2011, YFY saw revenues from its fine paper& board division reach NT$17 billion (US$566.67 million), along with NT$3.5 billion (US$116.67 million) revenues from CHP's fine paper business, challenging NT$20 billion (US$666.67 million) in total revenues in 2012.

A representative of CHP says the post-merged firm will supply half-wet pulp to YFY, helping CHP to cut cost in pulp-drying and accelerate fine-paper making by YFY, hence achieving mutual cost saving.