600M Yuan Expansion for Xinyi

Xinyi Glass Holdings (0868), China's largest exporter of auto glass, said it plans to invest 600 million yuan (HK$592.5 million) over the next two years to raise production capacity in order to meet rising demand, particularly in the mainland.

Internal resources and bank loans will be used for financing as the company said Tuesday it has no plans for placing shares or issuing bonds. "Issuing convertible bonds or placing shares is not a preferred option," said chief financial officer Jason Lau.

For the first eight months, China's import volume of sheet glass rose 18 percent year on year, while imports of ultra-clear photovoltaic glass - a special glass with integrated solar cells to convert solar energy into electricity - surged 76 percent.

Xinyi also benefited from lower heavy oil prices amid the rising price of sheet glass.

"Oil expenditures account for 30 percent of production costs, down from the previous 40 percent when the price of heavy oil peaked at 3,200 yuan per tonne," chief executive Gerry Tung told reporters. "The price of float [sheet] glass rose 10 percent to 1,800 yuan per tonne year on year."

The company plans to raise the annual production capacity of low- emission construction glass by more than 60 percent to 2.5 million square meters, from the existing 1.5 million square meters.

It also aims to set up a production line for its latest self-developed auto glass, Solar X, with a capacity of 25,000 pieces per annum.

These two production lines are to start operating in 2008.

Xinyi plans to raise its annual capacity for auto glass and bus windshields by 500,000 pieces and 30,000 pieces, respectively.

"We also plan to increase production capacity for float glass by 400,000 tonnes per annum," Tung said.

Shares of Xinyi closed unchanged Tuesday at HK$2.73.

600450 600M Yuan Expansion for Xinyi glassonweb.com

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