Annual growth rate of plastic pipe industry reached 12.7%

It is expected that China's largest plastic pipe producer Liansu Group will not reduce its business demand in the second half of this year. On August 31, the managers of Liansu Group said in an interview with the company's Hong Kong office that as China's urbanization process and the plastic pipeline are increasingly replacing other materials, the demand for plastic pipes will continue to grow.

The company's Huang Lianxi said that Liansu has recently built a new plant, and will also look for other suitable sites in the western region of China and brewing potential acquisitions.

The IPO recently completed by Liansu in the Hong Kong Stock Exchange did not raise the expected funds. It was originally expected to raise up to HK$2.16 billion (US$290 million), but only about HK$1.95 billion (US$250.8 million).

Liansu Group is located in Foshan City, Guangdong Province. In recent years, the company has been expanding its new production facilities. It has established factories in four locations outside the South China region where its headquarters is located. Currently, the total number of its factories has reached 11.

Although about two-thirds of Liansu’s sales still come from the traditional South China market, company executives said Liansu hopes that the country’s largest plastic pipe producer can expand its business base across the country. Liansu Group claims to own about 11% of China's plastic pipe market. The output of this market in 2009 was about 5.1 million tons.

Lin Shaoquan, vice president of Liansu Group, said: “Many people are in desperate need of housing. We always believe that the purpose of the government is only to control house prices, not to curb the development of the housing market.” Company managers say they believe the growth rate of Liansu Pipeline It will still exceed the overall growth of the market. Lin Shaoquan said: “From 2010 to 2015, the annual growth rate of China's plastic pipe industry will reach 12.7%, but we believe our business growth will exceed this rate.”

The Liansu Group’s sales in the first half of 2010 increased by 78% compared to the same period in 2009, and the profit increased by 189%. However, due to the severe financial crisis in China in early 2009, the domestic market experienced a strong recovery after the crisis. It is therefore difficult to draw exact conclusions from this comparative figure.