57 Million Leased Vietnam 120 Thousand Ping Land Construction Base, And The Annual Revenue Will Be At Least 1 Billion 900 Million.

Local KUKA home industry leader KUKA Limited by Share Ltd recently announced that the company intends to invest 449 million yuan in its own investment to build Vietnam's base annual production of 450 thousand standard suite of soft furniture products. This project is located in the same Shuai Industrial Zone in Vietnam. Sun Zhuang Sheng furniture (Vietnam) as the project implementation body will use 57 million yuan to lease 124 thousand and 800 square meters of land for 46 years of use right for project construction.

The bulletin shows that the project area is about 186 mu, and the total area of the project is about 147 thousand square meters, which is divided into two phases. It is expected that the project will be completed and put into operation at the end of 2021. The project is expected to reach the outline before the end of 2024. When it reaches the end of the year, it is expected to achieve annual production capacity of 450 thousand standard sets of soft sofa products and achieve an annual operating income of about 1 billion 900 million yuan.

The project is to build a production base for soft furniture in Ping Fu, Vietnam and Shuai City, including new production workshop, testing workshop, warehouse, supporting engineering facilities and purchase of production equipment. The total investment of the project is 449 million 35 thousand yuan, of which the cost of land acquisition is 56 million 685 thousand and 100 yuan, accounting for about 12.62%. Construction works such as production workshop, testing workshop and supporting engineering facilities are 269 million 600 thousand yuan, accounting for 60.04%; production testing and supporting equipment are 59 million yuan, accounting for 13.14%;

The project has an area of about 186 mu, with a total area of about 147 thousand square meters, and is expected to start construction in the first quarter of 2020. The first phase is expected to be completed and commissioned in the fourth quarter of 2020. The two phase is expected to start construction in the three quarter of 2020, and will be put into operation at the end of 2020. The project is expected to reach the end of 2024.

Xu Zhihan, an analyst at Zhongtai securities, believes that Vietnam's base is KUKA's first overseas base, and is the bridgehead of the company's overseas production exploration and mode research. After the project is completed, it will enhance efficiency and competitiveness from the overall value chain, and gradually achieve the optimization and leading edge of the company's overseas businesses in terms of cost, quality, delivery and service. In addition, we need to see that in 2017, the consumption of global soft furniture was US $69 billion 600 million, of which China and the United States accounted for 31% and 24%, and the United States was the largest overseas market for soft furniture consumption. In the context of Sino US trade tariff increases, the company's export business has been affected this year. It is estimated that KUKA's endogenous export earnings will grow negatively in the first three quarters of 2019. The construction of the Vietnam base project will effectively expand KUKA's capacity, speed up the supply chain capabilities, implement the low-cost operation and product leadership strategy, help KUKA grasp the trend of foreign trade orders transfer to overseas capacity under the tariff background, enhance market share and consolidate the status of the industry.

It is understood that the Vietnamese base built for investment is KUKA's first overseas base. The project can not only further expand the scale of the company's capacity, but also focus on the exploration and research of overseas production mode. After the project is completed, it will enhance efficiency and competitiveness from the overall value chain, and gradually achieve the optimization and leading edge of the company's overseas businesses in terms of cost, quality, delivery and service.

In addition, the construction of Vietnam base project will effectively expand KUKA's capacity, speed up the supply chain capabilities, carry out low-cost operation and product leading strategy, enhance market share and consolidate the industry status.

Public information shows that KUKA is committed to providing a healthy, comfortable and environmentally friendly home solution for the global family. From the sofa, dining table and chair of the guest dining room to the bedclothes of the bedroom, the whole house's customized furniture, mahogany furniture, etc., the products are exported to more than 120 countries and regions, and there are more than 6000 brand stores in the world. The main products of the company include sofa, matching products, soft beds and mattresses and customized home furnishing. Among them, sofa is the main product, including leather, cloth and functional subdivision of three kinds of sofa.

In the first three quarters of 2019, KUKA realized operating income of 7 billion 770 million yuan, an increase of 21.6% over the same period last year, achieving a net profit of 920 million yuan, an increase of 16.8% over the same period last year.