China XD Plastics Co., the country's biggest producer of modified plastics for auto parts, plans to almost triple production capacity over the next two years and is considering buying U.S. rivals as part of its expansion.
China XD Plastics, based in the northeast city of Harbin, will increase capacity to 100,000 tons in the first quarter of 2010 from 70,000 tons, Chief Financial Officer Taylor Zhang said in an interview at Bloomberg headquarters. The company will boost capacity to 200,000 tons in 2011, he said.
"We expect Chinese auto sales to grow another 25 to 30 percent next year," Zhang said. "We don't want to delay production."
China XD Plastics, whose materials are used in cars built by automakers such as Brilliance China Automotive Holdings Ltd., is expanding in the industrial northeast and in the nation's largest cities such as Beijing and Shanghai, said Chief Executive Officer Jie Han.
"We're targeting a market share of 25 to 40 percent by 2013 from the current 10 percent," he said.
China's auto market will expand almost 40 percent this year to become the world's biggest, Shiping Tong, chief executive officer of China Auto Logistics Inc., said Oct. 8.
China XD Plastics shares have risen sixfold in New York over the past year, spurred by the nation's economic recovery and government stimulus spending. The stock climbed 5.7 percent to $7.43 in Nasdaq stock market trading today.
The shares plunged 35 percent in the previous three days after the company agreed to sell more than 15,000 preferred shares convertible at $4.60 each in a $15.2 million private placement.
China XD Plastics may buy rivals in the U.S. to increase sales and build its name recognition, Han said.
"We're confident of the U.S. market," he said.
