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2012 is challenging for non-woven materials - Cecep Costin

31 Aug '12

5 min read

The board of directors of Cecep Costin New Materials Group Limited is pleased to announce the unaudited consolidated results of the Company and its subsidiaries (the “Group”) for the six months ended 30 June 2012 together with the comparative figures for the six months ended 30 June 2012. The consolidated results have been reviewed by the auditor and the audit committee of the Company.

Management Discussion and Analysis “The year of 2012 is the Group's year of consolidation”. The Group adheres to the guidelines of “consolidating foundation, guiding applications, identifying resources, and exploring new opportunities”, so as to promote industrial upgrading and transform the mode of production by shifting the focus from scientific management to an artistic style of management, from product sales to technology marketing, from managing talents to cultivating talents and from scientific innovation to creative technology.

The year of 2012 is extremely challenging for the non-woven materials and recycled chemical fibres industries. In the first half of the year, the Group's sales of non-woven materials and its gross profit margin were generally maintained as compared to the same period of last year. Whereas the sales and gross profit margin of recycled chemical fibres slid as compared to the same period of last year, mainly due to the macro-economic environment that dented the market demand for recycled chemical fibre products.

In addition, as the production lines of thermal resistant filtration materials were put into operation only in the fourth quarter of last year, and the sale is still at the incipient stage, there has been no profit contributed to the Group.

To meet the needs of the market and customers, the Group adjusted marketing strategy and established 6 divisions for business expansion focusing on improving products and services, including Sales Department of Filter Materials and Filter Bags, Sales Department of Shoe Materials and Household Materials, Sales Department of Decoration Materials, Sales Department of Chemical Fibres and Chemicals, Department of International Business Expansion and Industrial Consulting Service Platform. The Group was in the hope that the establishment of these departments could raise the professional standard for each targeted industries, better serve the customers and promote the sales of products.

The Group accomplished a comprehensive sales layout in the Greater China region by setting up more than 20 branch companies and representative offices in Beijing, Shanghai, Guangzhou and Hong Kong, with a view to maintaining closer ties with customers. Moreover, the Department of International Business Expansion expanded the sales coverage into Europe, South America, North America and Southeast Asia. The Department also adopted the mode of B2B E-commerce by leveraging on its internet trading platform to promote and advertise products. The Group also set targets for management, i.e. lowering cost, tapping new resources and reducing expenditure, eliminating bottlenecks and enhance efficiency.

Looking ahead, the Group will strive to realize the goal of building CECEP COSTIN New Materials Group into a comprehensive science and technology group within the “Third Five-Year Plan” period, adhere to the guidelines of “consolidating foundation, guiding applications, identifying resources, and exploring new opportunities”, so as to promote industrial upgrading and differentiated management, and transform and upgrade the conventional marketing to technology marketing.

As at 30 June 2012, the Group has 17 stitch-bonded production lines with a production capacity of approximately 103 million yards per annum and 9 needle-punching production lines with a production capacity of approximately 57 million yards per annum in respect of non-woven materials with 3D engineering structure; in respect of thermal resistant filtration materials, 3 production lines with a production capacity of approximately 21 million sq.m. per annum; in respect of recycled chemical fibres, 2 production lines with an annual production capacity of 42,000 tons, handling 53,000 tons of PET chips per annum. In addition to satisfying the internal production needs, the Group may sell any surplus PET chips to external parties.

As at 30 June 2012, the Group had 15 patents. Besides, the Group is applying for registration of 43 patents, including 35 patents deeveloped by the Group independently and 8 patents are jointly applied for registration by the Group and Tianjin Polytechnic University, with more than 20 new products being developed in aggregate.