The first project of Power Type Battery Workshop Construction
In January 2006 Jiangsu Best Power Supply Co., Ltd. （"Best Co.”）was set up, specializing in the production of power type VRLA battery for use powering electric bicycles. £3.2 million of the IPO proceeds was used for the construction of new plant covering 28,000 square meters and also the purchase of manufacturing equipment. The plant was commissioned in May and full daily production capacity of 12000 units was achieved by 31 July. The plant continues to run at full capacity with round the clock working.
The sales of power type batteries in this half year (without any significant contribution from the new factory, which came on stream in June 2006) reached £6.6M. The Group’s primary market for these batteries are electrical bicycle manufacturers in Tianjin, and in Jiangsu and Zhejiang provinces, and the Group has also become the major supplier to one of the biggest manufacturers in Beijing. In our primary market, we target those large manufacturers with an annual production of over 100,000 bicycles. In addition we are gradually increasing our share in the retail market for electric bicycles and accessories, which we regard as the secondary market for these products and we intend to make the secondary market the main market for the Company’s power type batteries in the future.
The second project of Power Type Battery Workshop Construction
Due to increased demand for its power type VRLA batteries which are used for powering electric bicycles, it has decided to expand its manufacturing facility at its wholly owned subsidiary Jiangsu Best Power Supply Co. The current manufacturing facility will be expanded by some 15,768 square metres and when construction is completed in June 2007 it will then total 43,768 square metres. Commercial production utilising the newly built facility is expected to commence in September 2007 and this extension will then increase the current production levels of 18,000 units per day to 24,000. The cost of expanding the manufacturing facility will be circa £1.14 million and this will be met from existing resources.
China Shoto expects the electric bicycle market in China will continue to grow. According to the latest statistics from the Jiangsu Bicycle Association, the production volume of the electric bicycle manufacturers in 2006 increased by more than 78% compared to that of 2005. The Group believes that this growing demand is generated both by the need for cheap and efficient transportation and the desire to switch to greener alternatives. |
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