New RMB 240 Million Venture For China Glass

FChinaknowledge.com reported that the following a deal with British firm Pilkington PLC last week, China Glass Holdings Ltd. has entered into another venture worth RMB 240 million, this time with Shaanxi Blue Star.

China Glass, the nation’s largest listed flat-glass producer, will draw a bank loan of RMB 20 million to pay for a 25% stake in Xianyang Blue Star Coated Glass’ registered capital. Shaanxi Blue Star will pay RMB 60 million from internal resources for its 75% holding.

The joint venture would involve the setting up of a second float glass production line at Shaanxi Blue Star’s plant in Xi’an.

The announcement comes amid a need to take advantage of lower production costs, after China Glass made a first-half loss of RMB 27 million this year as compared to a RMB 22 million profit a year earlier.

Without providing exact figures, Executive Director Zhou Cheng said the new venture will benefit from fuel costs that are 33% cheaper using Xianyang Blue Star lines.

According to Zhou, profit from the venture, which will add 800 tons to the present 110,000 tons annual output of China Glass, should start to register by 2008.

Last week, China Glass agreed with Pilkington to set up a low-iron glass manufacturing venture costing RMB 337.3 million in Taicang, Jiangsu province. The two companies will each contribute RMB 67.46 million in cash as registered capital for a 50% stake in the venture.

Read the entire news on the source link below.

600450 New RMB 240 Million Venture For China Glass glassonweb.com
Date: 13 October 2006
Source: Chinaknowledge.com

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