US packaging company poised for China growth

15-Sep-2009 - Last updated on 15-Mar-2017 at 06:42 GMT

Related tags Gross profit Revenue Food safety

A new state-of-the-art packaging facility in Hainan island, off the coast of southern China, will lead the expansion of US company Shiner International in the country, according to its presentation at a business conference in New York.

The plant, which is expected to open later this year will double the company’s production of food safe packaging to 30,000 tons/year within two years, delegates heard at the Rodman & Renshaw Annual Global Investment Conference Asia Track.

It expects food safe packaging capacity to reach 50,000 tons/year by 2013.

Although China’s melamine milk crisis last year hit sales of all packaged food sold in supermarkets, it brought opportunities too, a spokesperson told FoodProductionDaily.com. “This crisis give us a big impact at first but now it turns out to be an opportunity too since people are concerned more about the food quality and the government implemented the food safety law to control food quality.”

The company’s business has also been affected by global recession but the food business is now slowly recovering, she added.

Increasing urbanisation

Shiner's chairman, Yuet Ying told the conference: “With the increasing urbanization and rising consumer incomes in China, Shiner is positioned to continue its expansion and strengthen its placement as the leading supplier in China's domestic market. And it will increase its presence in international markets by increasing marketing through direct sales, produce superior product quality and technical content, while proving a cost efficient product for our customers."

At the conference, the company reported 2009 sales revenue at $34m; gross profit of $4.8m; gross profit margin of 14.1% and net income of $0.1m.

Food packaging sales during the first half of this year reached $5.4m which accounts for 36% of total sales. Shiner’s products are used to package a range of foods including biscuits, cookies, cakes, candies, nuts, meat, drinks and instant noodles.

Shiner predicted that for 2013 that sales revenue would grow to $180m, a 50% increase versus 2012 and gross profit would reach $37.2m. It forecast a gross profit margin of 20.7% and net income of $20.5m, a 71% increase on projections for 2012.

Coated film

Rising consumer incomes are increasing demand for Shiner’s coating of BOPP film, said the spokesperson. “Food packaged in coated film has a much longer shelf life and a much better quality protection than packaged in bare BOPP film,” she said. “In the European and US market, about 20% of all the BOPP films are coated, However, in China, currently only around 0.5%. As more and more Chinese people move to the cities….the need for coated film will explode.”

About 60 per cent of Shiner's customers are located in China, with the remainder

in South east Asia, Europe, the Middle East and North America.