Chinese bamboo firm predicts fast growth after stock market bow
Frankfurt (AFP) Nov 6, 2007
A Chinese bamboo producer is hoping its debut on the stock market will be as vigorous as the plant's legendary growth when it hits the Frankfurt exchange later this month.
Asian Bamboo is so confident it will succeed with its first stock market listing anywhere in the world that it has moved its headquarters to the northern German port city of Hamburg ahead of its launch on the market on November 16.
"Bamboo is an extremely fast-growing natural resource," Asian Bamboo's 37-year-old founder Lin Zuojun said at a news conference on Monday to present his company.
"Bamboo is environmentally friendly and at the same time economically attractive. European investors understand that," he said.
Lin is hoping to raise between 76 million and 124 million euros (110 million and 180 million dollars) from the flotation -- a lofty target for a company which had turnover last year of just 11 million euros and net profit of four million euros.
The company's financial director Edmund Chen said that while those figures were modest, they were underpinned by strong growth.
"We have almost doubled our turnover and profit every year since 2004," he said. "And the Chinese market is huge."
Bamboo is used as a cheaper substitute for wood in furniture, or in flooring and both are in heavy demand from China's rapidly growing middle class.
China is already using more wood than it produces.
But the plant's big selling point is that while an oak tree takes 60 years to grow, the Moso type of bamboo can grow two metres (six feet six inches) tall in just two months.
"It is one of the fastest-growing plants in the world," said Asian Bamboo's head of research George Srzednicki.
The company is also hoping to ride the wave of demand for organic food with its bamboo shoots -- traditionally sliced into Chinese food.
Most of its current production of bamboo shoots is exported to Japan, but, once again, the market in China is also growing.
With the millions it is hoping to raise from the flotation, Asian Bamboo plans to take leases on new plantations in southeast China, where plentiful rainfall creates ideal growing conditions.
The company is also hoping to invest in its own bamboo flooring factory, which is due to open in 2009.
Lin dismisses sceptics who say Chinese companies shrivel without their government's helping hand, and brushes off suggestions that Asian Bamboo's supervisory board, most of whose members are German, will find its work obstructed by Beijing.
"We will be successful," he said.
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