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On the back of continuous success in merging and reshuffling a number of State-owned textile and chemical fibre enterprises, Ascent & Affluence Investment Group (A&A) is turning its focus on Europe and North America where it plans to extend its scope.
Initially the group intends to purchase some wood pulp factories in Canada and Northern Europe to ensure the raw material resources for its planned large-scale production, according to company CEO and President Liang Jian.
The proposed mergers are still being negotiated, and the final results are not currently available. With rich wood resources, Canada and Northern Europe have become attractive to A&A which plans to enlarge its production , Liang said.
As a Fujian-based private enterprise initiated in 1993, A&A is known in the domestic fibre industry for its rapid development in merging and revitalizing several large-scale State-owned enterprises, including Dandong Chemical Fibre Stock Co Ltd (Dandong).
After taking a 90 percent share of Dandong last May, A&A has injected vitality into the traditional enterprise. In the first half of this year, Dandong made profits totaling 66 million yuan (US$7.97 million), an increase of 853 percent compared with 6.94 million yuan (US$838,000) over the same period last year.
By 2003, A&A has taken the lead in the textile and chemical fibre industry across Fujian, Liaoning, Anhui, Hunan and Jilin provinces with total assets of 5 billion yuan (US$604 million).
"Besides our acquisition steps both at home and abroad, we have also started to attach more importance to developing specific fibre products to strengthen the group's comprehensive capacity," said Liang.
A&A established a research center in Shanghai in April to develop new chemical fibres. More than US$24 million has been invested in research and production of new fibre.
"Through the acquisition moves and development in recent years, A&A has accumulated certain strengths to develop its own new products with higher added value. This allows us to catch up with the development of the world's leading fibre companies," Liang said.
Although China has numerous chemical fibre enterprises producing the largest volume of fibre in the world, there are still none with the capacity to compete with overseas fibre giants such as US-based DuPont Fibers, Britain-based BP Fibres and SK Fibre based in South Korea.
The smaller scale of China's fibre companies restricts their strength to invest huge amounts of capital to develop their specific products. As a result they have to focus on the production of general fibre products which make less profit.
Therefore, A&A chose to acquire and cooperate with some of the country's existing textile and chemical fibre companies to make itself stronger, and then develop its own differential products. Its eventual aim is to become a major player on the world market, said Liang.
A&A established the China Traditional Industries Investment Fund and China Chemical Fibre Industry Investment Fund in Hong Kong last month to generate more international capital to develop China's traditional fibre industry.
(China Daily November 15, 2004)
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