In a move to expedite its growth and gain market visibility, China Fibretech launched an IPO to raise net proceeds of about $16.3 million for the company. The company is offering 133.65 million invitation shares - comprising 89.1 million new shares and 44.55 million vendor shares - at $0.21 apiece for a mainboard listing. The vendor shares will raise about $9.1 million for its owners. Two million shares will be offered to retail investors and 131.65 million shares by way of placement.

The Fujian-based company, which provides fabric dyeing and postprocessing treatment services, said that it would require some $26.1 million for the expansion plans which will double its fabric dyeing capacity to 120,000 tonnes per annum by end-2010. China Fibretech will use about $14 million from its expected net proceeds to construct new facilities and acquire additional machinery for its dyeing and settling lines. Another $1 million will be used to expand its R&D capabilities and the remaining $1.3 million for general working capital.

The group is also keen on expansion for its popular fabrics like urethane elastic fabric and introducing new services and treatment that offer higher margins. These include fabric treatments to enhance fabric strength, mould resistance, fluorine resistance, and to impart anti-dust, anti-oil and anti-dirt properties.

From 2004 to 2006, its net profit grew a compounded annual growth rate of 48%. Its net profit grew 43.3% from a year ago to 64.76 million yuan in fiscal 2006 on the back of a 31.5% jump in revenue 329.9 million yuan ($65.7 million). For the 9 months ended Sept 30, the group's revenue and net profit was 280.2 million yuan and 75.4 million yuan respectively.

'Based on the steady growth that we have seen over the years, we are confident of maintaining the growth pace,' group executive chairman and chief executive officer Wu Xinhua told BT.