Yuen Foong Yu Expand Output of Consumer Paper in China

Taipei, March 18, 2011 (CENS)--Yuen Foong Yu Paper Mfg. Co., Ltd. (YFY), Taiwan's leading paper-product manufacturer, has been approved by its directors to raise paid-in capital by US$18 million to increase investments in China.

YFY said it has concrete plans to set up a plant in Yangzhou, Jiangsu province to expand production of household paper, with such output to total 90,000 metric tons annually after the new facility begins mass production sometime in the second quarter.

YFY has two plants making household paper products, one in Kunshan, Jiangsu province and the other in Beijing to tap the greater Shanghai and northern Chinese markets.

YFY said its Kunshan and Beijing plants have an annual production capacity of 60,000 metric tons combined to mainly supply local and nearby markets. The proposed Yangzhou plant will be similarly developed to distribute products via supermarkets and hypermarkets.

Besides expanding household paper product output, YFY will also increase capacity of industrial paper by raising the number of paper-product plants from 12 to 20 by the end of this year, achieving annual output of industrial paper of two billion square meters.

Institutional investors say YFY will keep gross profit margin at over 15% with pretax earnings reaching NT$1.5 billion, or NT$0.9 per share, this year.