Nan Ya Plastics, Lan Fa Textile to jointly tap market in China

Taipei, Feb. 13, 2004 (CENS)--Nan Ya Plastics Corp. and Lan Fa Textile Co. have decided to jointly tap the market in mainland China through strategic alliance. The former is Taiwan's largest manufacturer of polyester filament, and the latter the largest polyester texture yarn producer.

Nan Ya decided last year to establish on its own an integrated textile plant in Kunsan of Jiangsu Province, which can not only generate upstream materials including polyester articles and filament but can also handle rear-end processes of dyeing, finishing, and weaving of cloth. The plant is slated for completion by the end of 2006 and the total investment capital is roughly estimated at NT$10 billion (US$294.12 million at US$1 = NT$34).

Lan Fa is already Nan Ya's strategic partner in Taiwan for the development of functional fiber. With Nan Ya's full support, Lan Fa has recently developed a series of functional textile fibers, including perspiration-absorbing & quick-drying fabric. Today the company is Taiwan's largest polyester texture yarn maker and boasts the highest average price for yarns.

To go in line with its strategic partner to tap the mainland market, Lan Fa's board currently approved the proposal of launching US$19.8 million to set up a polyester texture yarn plant in Hangzhou of Zhejiang Province, near Jiangsu. The project has to be ratified by Investment Commission (IC) under the Ministry of Economic Affairs (MOEA) and the scale of the facilities to be installed in the plant there will depend on the supply of local electricity.

Lan Fa has recently purchased 12 new high-speed false twist machines, with installation of which slated for completion in the third quarter of this year. With the new machines, the company will have a total of 80 high-speed false twist machines at its two plants here, which may rank Lan Fa among the world's top five polyester texture yarn makers.

A senior official at the company indicated that Lan Fa should not miss the chance of tapping the market in the mainland boasting great sales potential. Last year the mainland's textile makers imported a total of 120,000 metric tons of polyester texture yarn from Taiwan at an average price of NT$55 (US$1.62) per kilogram, up 60% from the price of a decade ago.