PIPES maker Crown Asia Chemicals Corp. said it increased the capacity of its compounds-manufacturing plant by 10 percent.
The company that manufactures its own brand of pipes and fittings said it received a new line of machines from Germany that will produce its new line of polyvinyl chloride compounds (PVC).
These compounds are the raw products essential in making plastic bottles, IC tube packaging, shrink films and labels. Crown Asia supplies these compounds to other firms, which will then manufacture them based on their own specifications.
The new compounding line will add another 1,500 metric tons per year to Crown Asia’s existing compounding annual capacity of 15,000 MT, the company said.
It started PVC compounding production in 1990 with 1,500 MT annually under the trademark Petrovin. “By enhancing our production capacity in these new product applications, we are looking at growing our local customer base, which is expected to translate into a notable boost in our top-line sales revenues,” said Eugene Lee Villanueva, Crown Asia president and general manager of the compounds division.
Currently, revenues from this specialized application account for only 14 percent of the revenue of the company’s compounds division, with 86 percent of production capacity dedicated to the production of PVC compounds for wires and cables for export and local markets.
The new compounding line costs P12.5 million, funded from initial-public-offering proceeds from the company’s listing in the Philippine Stock Exchange on April 27 last year.
The company said it had a profit of P70.49 million from January to September 2015, 60 percent higher than the previous year’s P65.38 million.
For the third quarter, sales increased 28 percent to P799.24 million, from 2014’s P622.37 million.
Sales from the compounds division increased 27 percent to P514.45 million, from P403.25 million during the previous year, driven by export sales that rose 69 percent to P290.52 million, from P171.59 million last year.
Meanwhile, pipes group sales rose by 30 percent to P284.78 million, from P219.12 million.
“Cost of goods sold increased to P612.24 million for the three quarters, from P474.31 million. Gross profit margin increased by 26 percent, with P187.00 million for the three quarters 2015, compared to P148.06 million year to year,” the company said.
The company said it opened its new storage facility last December, which will be for its pipes and fittings.
“The warehouse is two levels, to provide space for adequate warehousing requirements,” it said.
Crown Asia was able to raise P222.78 million from its initial public offering, issuing 158 million primary common shares.
The company, owned by the Villanueva and Perez families, started commercial operations in 1990 with the trading of imported polyethylene compounds and paraffin waxes.