A VISIT to reinforced material firm Sijia Group’s (HK: 1863) Fujian Province-based production facilities confirmed that the Hong Kong-listed firm is working overtime to meet a surge of orders for rescue and relief equipment related to the recent floods affecting much of Thailand, including the capital Bangkok.
In fact, as of yesterday (Nov 16), management announced that flood-related export orders to Thailand had topped one million units.
This may have something to do with Sijia's strong share price performance these past few weeks.
Sijia said it has been providing "full support" to the Thai people during the ongoing flood disaster, with supplies of high quality products such as raingear, waders and protective garments, as well as life jackets and lifeboats, strengthening its relationship with the Southeast Asian market.
"We are very sorry for the Thai floods. Now the best way we can help is to meet the huge requirements for lifeboats and raingear products among Thailand's people. Since October, the group has received numerous urgent orders, sharply driving up the export volume of lifeboats, waders and protective garments," said Sijia Chairman Lin Shengxiong.
Thailand is suffering through its worst floods in half a century.
Many factories have been forced to suspend production, making buyers look for opportunities in overseas markets due to a serious lack of relief supplies at home, Sijia said.
"With excellent brand awareness, Sijia waders, protective garments and lifeboats quickly attracted attention from Thailand's importers. So far Sijia's Xiamen subsidiary received over one million unit orders for waders, protective garments, lifeboats and raingear from Thai customers," the company added.
In the space of a short time, Sijia's waders and protective garments were sold out. Now the group says it is actively transferring storage from other offices in the PRC, as well as engaging in extra production at full speed, with the aim of providing real-time support to the Thai people.
"During this event, the brand awareness of Sijia's waders and protective garments has been greatly enhanced, and reveals to us huge potential in the Southeast Asian market. Though our export volume increased a lot due to Thai floods, Sijia sincerely hopes the Thai people can overcome the disaster smoothly and quickly," Chairman Lin added.
NextInsight's recent meeting at the company’s plant in Xiamen was shifted at the last minute as there were virtually no management personnel available to show visitors around the facilities due to the extremely busy workload of late trying to keep up with shipments to the deluged Southeast Asian nation.
Instead, I made my way to a major distributor of the group’s products in Xiamen, a bit closer to downtown, where the facility’s manager Mr. Chu kindly showed me around and answered a few questions.
“It goes without saying that our hearts go out to the victims of the Thai floods. We are doing our best to meet surging orders for inflatable liferafts, flotation devices, waders and waterproof garments to assist them in their relief and recovery efforts there.
“We are virtually running at full tilt to keep up with demand for these products,” he said.
Indeed, company executives were all meeting in Fuzhou – three hours north – at the time and staff at the distributor were scurrying about answering phones and taking orders during my visit.
“I am not at all surprised that they simply cannot accommodate visitors at their Xiamen factory right now. They are really working hard to make sure shipment deadlines are honored,” Mr. Chu added.
He also said that the orders from Thailand were coming from both the government as well as international organizations, including of course UN-backed agencies.
The frantic flood-related order spike at Sijia’s production facilities in the Tongan District of Xiamen come as no surprise, given the nature of the site’s output.
Major products coming out of the factory include inflatable boats, waterproof clothing, waders and methane tanks -- all of which typically experience strong demand amid catastrophic floods like those ravaging Thailand today.
In China, Sijia's waterproof waders enjoy a 20% market share, inflatable products have a 29% share and an 18% share for the reinforced materials used in inflatable products.
Sijia’s first half net profit rose by a healthy 19.1% to 174.9 mln yuan, while gross profit surged 23.7% to 278.4 mln.
Shortly thereafter, Sijia Chairman Lin Shengxiong said: “We are confident we can provide even better returns for our shareholders in the second half of this year.”
This outlook will surely come closer to fruition with the spike in new orders from Thailand.
Sijia Group is a leading manufacturer of Reinforced Materials in the PRC, and is principally engaged in the design, development, manufacture and sale of Reinforced Materials (polymer processed high strength polyester fabric composite materials and other reinforced composite materials), Conventional Materials as well as downstream related inflatable and waterproof end products targeting the outdoor leisure sports consumer market. To capture the growing business opportunities in the PRC's clean energy industry, the Group began the sale of biogas tank materials and biogas tank end products in 2009.
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