Asia Packaging to buy assets of Chinese plastic printing company

1 March 2012 (Last Updated March 1st, 2012 18:30)

Asia Packaging, through its wholly-owned subsidiary Mei Tak, has signed an agreement to buy certain assets of JinJiang City Anhai Hongrizhong worth RMB50m ($8m).

Asia Packaging, through its wholly-owned subsidiary Mei Tak, has signed an agreement to buy certain assets of JinJiang City Anhai Hongrizhong worth RMB50m ($8m).

Under the terms of the agreement, Mei Tak will purchase assets involved in plastic colour printing from Anhai Hongrizhong, and hopes to close the deal within the next week.

The deal includes the JinJiang plant and equipment, which Asia Packaging will continue to run, but will eventually move the operations to its current film plant in Yichun City, Jiangxi province.

Asia Packaging president and CEO Wenge Hong said the acquisition of assets of Anhai Hongrizhong, which generated over $6m in revenue last year, will increase the company's mix of higher margin products.

With the acquisition, the company forecasts total revenues for the period from 1 April 2012 to 31 March 2013, to exceed RMB60m ($10m) and from 1 April 2012 to 31 March 2014 to exceed RMB75m ($12m).

The company achieved revenues of $11m for the third quarter ended 31 December 2011, representing 8.7% growth over the corresponding period last year, with earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 13.7%.

Net income for the quarter was 21% of gross revenue, compared to 20.7% of gross revenue for the comparable period last year, the company said.

Asia Packaging was formed in April 2011 through a reverse takeover of a shell company by Mei Tak Group and its main business originally was cast polypropylene film.

The company diversified last autumn when it installed two metallised PET film lines in Yichun City, each with £5.3m per year of production capacity.