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Haisheng may sell shares to boost exports

05-18-2010 13:57 BJT

BEIJING, May 18 -- China Haisheng Juice Holdings Co., a supplier of apple-juice concentrate to Coca-Cola Co. and PepsiCo Inc., may sell shares to help finance an expansion aimed at doubling its sales overseas.

China’s biggest exporter of the concentrate aims to control 50 percent of overseas shipments by 2015 after accounting for 25 percent last year, said vice president Sabina Liu. Haisheng will double production capacity through purchases and the expansion of existing plants, she said last week.

“Acquisitions are really the only option for expansion,” Liu, 36, said in Xi’an, capital of Shaanxi Province and where Haisheng is based. “Because if we were to build new plants now” that may lead to overcapacity and lower prices, she said.

Haisheng is increasing exports as an economic recovery in the United States, its biggest market, helps raise prices, improving profitability and sales at the concentrate maker. The company last month said it agreed to pay HK$80.6 million (US$10.4 million) for Itochu Corp.’s juice plants in China, which will help increase Haisheng’s capacity by as much as 15 percent.

“Haisheng is facing increasing competition at home and it remains to be seen how well its exports will recover given uncertainty over the global economic recovery,” said Lawrence Chor, an analyst at Taifook Securities Group in Hong Kong.

“When the time comes we’ll see if selling debt, taking loans or selling shares makes more sense for funding acquisitions,” Liu said. “A share sale is more likely.”

About half the new capacity Haisheng aims to add in the next five years will come from acquisitions, with the remainder from the expansion of its existing facilities and contracting work to third-party producers, Liu said.

Editor:Zhang Jingya |Source: Shenzhen Daily

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