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Jingwei Textile hurt by war on excess spindle capacity

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Jingwei Textile Machinery said net profit fell 78.01 per cent to 7.69 million yuan (about HK$7.15 million) last year, hit by slow demand for spindles and a government policy of disposing of spindles.

Turnover fell 30.27 per cent to 409.63 million yuan.

Earnings per share fell to two fen, against eight fen. No dividend will be paid.

Vice-chairman Liu Shitong said yesterday: 'The year 1998 was the most difficult year for our company, and it was also a year in which our company made a breakthrough in adjusting our operational policy and product mix, developing new products and expanding exports.' Jingwei, the mainland's largest textile-machinery manufacturer, suffered a loss of 184 million yuan in turnover for its key product - cotton-spinning frames - under Beijing's policy of suppressing demand for spindles.

The company was also hit by reduced economic efficiency and heavy losses of many textile-manufacturing firms, in addition to a domestic price war amid an over-supply of textile-machinery products.

Average product prices fell about 10 per cent last year, Mr Liu said.

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