Glassmaker for 550m yuan ventures

Luoyang Glass, China's largest publicly traded flat glass maker, which issued a profit warning last month, plans to set up two joint ventures with its parent to produce ultra-thin glass and process raw materials with a total investment of 550 million yuan (HK$517 million).

The Henan-based glass producer said Friday it would own an 80 percent stake of the two joint ventures, Long Hai and Long Hao projects, which have a registered capital of 60 million yuan and 50 million yuan respectively.Its parent, China Luoyang Float Glass (Group), would hold 20 percent. Long Hai will produce and sell ultra-thin glass with thickness between 0.55 millimeter to 3mm, with a total investment estimated at 300 million yuan.

In another project, in which Long Hao plans to make and sell float glass as well as to provide related consultancy and technical support services, total investment is estimated to amount 250 million yuan.

Luoyang Glass will contribute a total of 88 million yuan for the registered capital of the two joint ventures in cash, the remainder involved will be funded by bank borrowings or capital market fund-raising activities under the name of the new companies.

``The market potential for the ultra-thin glass in the PRC is enormous,'' said Luoyang Glass, as the government strongly supports the development of the photoelectric industry.

Ultra-thin glass is a major raw material used in the production of electronic products such as TN-LCD display panels and PDA.

Glass with thickness less than 1mm used in China is imported, but a demand slowdown is expected because of government austerity measures.

600450 Glassmaker for 550m yuan ventures
Date: 30 May 2005

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