Taipei, Aug. 16 (CNA) Cheng Loong Corp., one of Taiwan's leading paper manufacturers, said Thursday it is in talks with one of its counterparts in China on a possible acquisition.
The paper maker said it is hoping to buy the Chinese company, which has an annual production capacity of one million metric tons and great potential for expansion because it is situated on a huge tract of land.
In China, large paper manufacturers have an advantage over smaller competitors because of higher efficiency, Cheng Loong said.
Although the global economy is slowing down, the down cycle in the industrial sector offers a good opportunity for acquisitions, the Taiwanese firm said.
It declined to disclose any further information about the plan, saying expansion through acquisitions is its main strategy for investment in China.
In fact, the company said, it has also made contact with other Chinese and Japanese paper firms in a bid to acquire their production assets on the mainland.
Cheng Loong currently operates production bases in several Chinese cities, including Shanghai, Suzhou, Kunshan, Zhengzhou, Dongguan and Tianjin, according to its website.
The company said the annual capacity of its production lines in China is only about 450,000 metric tons, hence the need for expansion.
Cheng Loong has established footholds in other countries besides China, such as Vietnam, Japan, Indonesia and the United States.
In the first seven months of this year, Cheng Loong posted NT$14.68 billion (US$489 million) in sales, up 7.62 percent from a year earlier.
(By Wei Shu and Frances Huang)