(Yicai) Oct. 24 -- Gaona Aero Material, a Chinese supplier of high temperature alloy products, said it will invest CNY138 million (USD19.1 million) building a factory for key petrochemical equipment components in Saudi Arabia to better meet the needs of Middle Eastern clients and promote its overseas development.

Gaona Aero's unit Qingdao Xinlitong Industry will build the project in Jubail Industrial City, the Beijing-based parent firm announced late yesterday. The new plant will mainly produce ethylene cracking furnace tubes used in the petrochemical industry, it added, without disclosing its annual production capacity or providing a return on investment estimate.

Ethylene cracking furnace tubes are core components of ethylene cracking furnaces in petrochemical plants. They serve as reaction vessels that crack petrochemical feedstocks at high temperatures to produce basic chemical raw materials, including ethylene and propylene.

Xinlitong Industry is a leading supplier of ethylene cracking furnace tubes in China, Gaona Aero noted, adding that investing in the factory in Saudi Arabia will help enhance the competitiveness and brand influence of the unit's products in overseas markets and improve client responsiveness.

"Saudi Arabia is the largest economy in the Middle East and North Africa region, with a stable local political and business environment and relatively low investment risks," Gaona Aero said.

On the same day, Gaona Aero reported its third-quarter profit rose 10 percent to CNY60.8 million (USD8.4 million) from a year earlier, while its operating revenue jumped 23 percent to CNY987 million (USD136.21 million) thanks to a recovery in demand for its high temperature alloy products in the aerospace, metallurgical, and energy sectors. Its income had climbed 5.1 percent in the six months ended June 30 from a year ago.

For the first three quarters of this year, Gaona Aero saw its profit tumble 47 percent to CNY125 million (USD16.3 million) from a year earlier, mainly due to the year-on-year increase in raw material costs and a drop in product prices, it said. Its operating revenue rose 11 percent to CNY2.8 billion (USD387 million).

Shares of Gaona Aero [SHE: 300034] fell 0.3 percent to CNY16.67 (USD2.34) each as of 10.20 a.m. in Shenzhen today. 

Editor: Martin Kadiev