Zhejiang Glass, the second-largest Hong Kong-listed mainland glassmaker by market value, said its 1H/05 net profit was down 36% as the average sale price of its products fell 7% even though energy & raw materials costs were up. The company reported net profit of CNY 69.7M (HKD 66.88M) for the 1H 2005, down from CNY 109.9M year-on-year. The company's sales rose very slightly, to CNY 568.7M from CNY 565M for the 1H/04. "We suffered from overcapacity in the flat-glass industry,"chairman Feng Guangcheng said in a statement. The combination of static sales & rising costs hit gross margins, which fell to 26% (35%). In response, Zhejiang Glass tried to boost production of higher valued added products including ultra-thin flat glass, which commands a premium. The company plans a capital spend of CNY 1.5BN in 2005, with 2/3 going for a new soda-ash plant in Qinghai.
