(Yicai Global) Nov. 25 -- Chinese furniture retailer Kuka Home plans to invest CNY505 million (USD76.6 million) to establish a production base in Vietnam to avert US tariffs on China-made goods. Its shares slumped.

The maker of sofas, beds, and dining room sets will purchase 46-year land use rights and locate the plant at an industrial park in Dong Xoai, southern Vietnam, to make 500,000 sets of different types of furniture each year, the Hangzhou-based firm said in a statement yesterday.

Kuka's stock price [SHA: 603816] plunged 5.4 percent to CNY77.95 (USD11.90) this afternoon. But the shares have risen almost 70 percent this year.

Building plants overseas should improve Kuka's exporting capabilities while reducing the impact of US tariffs on Chinese goods amid the trade frictions between the two countries, the firm said. The Donald Trump administration has imposed higher import duties on billions of dollars worth of China-made products.

The factory should bring about CNY1.7 billion (USD258 million) in annual revenue to Kuka once completed. The firm expects to start construction by December, finish the first phase in the first quarter of 2022, and achieve full capacity by December 2025.

Editor: Emmi Laine