(Yicai) June 24 -- Huanlejia Food Group’s shares rose after the Chinese producer of canned foods and fruit beverages said it plans to build a coconut‐processing factory in Indonesia for USD21 million, expanding its overseas footprint and deepening its ties with local suppliers.

Huanlejia Food [SHE: 300997] closed up 3.4 percent at CNY16.33 (USD2.28) a share today, after earlier climbing by as much as 4.2 percent. The wider Shenzhen market added 1.7 percent.

The plant will be located in North Sumatra and produce cold-pressed coconut pulp juice, coconut water, and desiccated coconut for the local and overseas markets, the Zhanjiang-based company announced late yesterday, without disclosing the annual production capacity. 

The factory will take 12 months to build, with a construction area of around 7,000 square meters, the company said. The investment payback period is estimated to be just over three and a half years, it said.

Indonesia, one of the world's major coconut producers, offers strategic advantages for Huanlejia Food, which has been in the coconut juice segment for years, the firm said, adding that the new project will enhance its product supply capacity, expand its overseas market, and help deepen cooperation with local raw material suppliers in both day-to-day operations and potential joint investments.

Coconut juice is one of Huanlejia Food's core products. The company turned out 171,899 tons of the drink last year, earning revenue of CNY964 million (USD134 million), which accounted for 52 percent of its total operating income, its annual financial report showed.

Huanlejia Food's gets most of its cold-pressed coconut pulp juice, the main raw material for coconut drinks, from Vietnam and other Southeast Asian countries.

Editor: Martin Kadiev