China's Vinda International profit growth nearly doubles with boost from low pulp prices, looks to target sanitary papers for adults and children

BEIJING , September 21, 2009 () – Hong Kong-based Vinda International Holdings Ltd nearly doubled (up 190%) its growth in profits as it bought pulp at cyclical lows and tapped into new markets.

Li Chao Wang, chairman of Vinda International, said that the company purchased pulp when it had bottomed out, locking in its pulp cost. This is expected to positively affect the company’s gross profit.

Vinda International’s CFO said that he expects the company’s pulp inventory of 150,000 tonnes at the end of July to last until first-quarter 2010. The buying price of pulp was US$500 per tonne in first-half 2009, and is expected to remain at that level for the second quarter.

Li noted that, following the debut of the wet paper towel segment in first-half 2009, the company will tap sanitary paper markets for grown-ups and children. The personal care business is expected to contribute 10% to the company’s total income in the next three to four years.

In first-quarter 2009, the Vinda Internationals average sales price rose 3.8% to RMB12,500/tonne (US$1,830/tonne), with sales volume jumping 9.5% to 1.074 million tonnes. The company’s future price increases will depend on market conditions, but its prices increased in second-half 2008 and first-half 2009.

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