Shanghai Asia Holdings

Future Plans

Our Group's primary objective is to become a leading and integrated provider of packaging solutions to major cigarette manufacturers in the PRC. We also intend to grow our business by acquiring and/or investing in other packaging capabilities to serve other growing industries.

We intend to achieve these objectives through the pursuing of the following plans:-

Acquire and/or invest in additional manufacturing capabilities

We currently specialise in gravure printing of cigarette packaging, and currently do not have the resources or capabilities to undertake other forms of printing and related activities. Such related activities include the production of aluminium coated paperboards which are used in some of our products. Currently, we purchase such paperboards from third party suppliers. In order to further vertically integrate our services, we intend to invest in such capabilities so that this work can be undertaken by our Group, enabling us to provide a more complete service to our customers and at competitive prices. Aside from vertically integrating our services, we also intend to acquire new manufacturing capabilities to expand our product offering to our existing customers as well as to diversify our printing business into other industries.

Production of metallised transfer paperboards

This can be a substitute for aluminum laminated paperboards for environmentally conscious customers. While metallised transfer technology can achieve the same quality standards as laminated paperboards, the metallised transfer paperboard are recyclable and biodegradable.

The process involves evaporating pure aluminum in a vacuum chamber and then condensing the aluminum vapour onto a pre-coated plastic film. The layer of aluminum is then transferred onto the paperboard leaving the paperboard with a shiny layer of aluminum. The plastic film can be recycled and reused thus reducing waste and cost.

We intend to acquire this capability by seeking opportunities for a suitable company which we can invest into or acquire.
Production of thin gauge aluminum foil

Aside from the paper boxes, cigarette packaging also includes a layer of foil which protects the sticks of cigarettes. Currently our customers in the cigarette manufacturing industry obtain this aluminum foil from other suppliers. In addition, as we believe that the cigarette industry in the PRC is growing, we are able to better capitalise on this growth by investing in such capability and expanding our product offering to our existing customers. We have identified a potential customer base through NTIH's existing customers in the cigarette industry. Currently, NTIH purchases aluminum foil from third party suppliers for its products. Upon successfully commencing operations of produce thin gauge aluminum foil, we will be able to supply NTIH with a portion of its requirement of aluminum foil.

We intend to acquire this capability by acquiring the necessary machinery to produce thin gauge aluminum foil. To better manage our capital resources, we will consider acquiring suitable used machinery to embark on this business. This may also involve constructing a new factory or acquiring additional premises.

Aside from cigarette packaging, other applications of aluminum foil include electronic capacitors, food and beverage packaging, and pharmaceutical packaging for medical pills. This presents our Group with the potential to diversify into providing packaging solutions to other industries.

Pursue strategic alliances and/or joint ventures

We may consider strategic alliances and/or joint ventures with partners including our suppliers, customers or other third parties as and when the opportunity arises. This will allow our Group to expand our customer base and networks throughout the PRC or to lower our operational risks. Currently, our major customers such as Nanjing Cigarette Factory and Shanghai Tobacco Group are based in the Jiangsu province. By seeking to expand our customer base into other regions in the PRC, we seek to reduce our dependence on our current market. In particular, we are currently in the process of negotiating to enter into a joint venture with a company in the Hubei province so as to expand our customer base there.

Enhance production capacity and efficiency

To support our expansion plans in our business, we plan to enhance our production capacity and efficiency by acquiring new gravure printing machinery. We currently have three gravure printing machines of which the two ATN 6-colour and 8-colour rotogravure printing machines have been in operation for 6 to 8 years. We have contracted to acquire a new ATN 8-colour rotogravure printing machine to replace our existing 8-colour machine.

This new machinery is expected to increase our production capacity by 120,000 cases per annum.