(Yicai) Oct. 28 -- Shares of Zhongxin Environmental Protection Technology Group rose after the Chinese supplier of biodegradable molded products made from plant fibers said it plans to build a new factory in Indonesia and released positive third-quarter earnings.

Zhongxin Environmental [SHA: 603091] closed 5.7 percent up at CNY43.35 (USD6.50) in Shanghai today, after earlier gaining as much as 8.5 percent.

Zhongxin Environmental will invest USD60 million to build a new biodegradable tableware plant with an annual production capacity of 50,000 tons in the WIP International Industrial Park in Indonesia, the Zhejiang province-based firm announced yesterday.

The factory is expected to be built within a year, after which production capacity will ramp up gradually, with full operation expected in two years, Zhongxin Environmental noted, without revealing any further details.

The project will help the company strengthen its supply chain resilience, promote sustainable development under the environmental, social, and governance framework, respond more flexibly to potential impacts from global macroeconomic fluctuations, changes in industrial policies, and shifts in the international trade landscape, and boost its profit margins, Zhongxin Environmental added.

Zhongxin Environmental mainly supplies overseas customers, including AmerCare Royal, Sabert, World Centric, Eco-Products, and Clark Associates in the United States, Huhtamaki in Finland, and Duni Group in Sweden, with naturally biodegradable plant-fiber tableware and catering products. Last year, its overseas sales revenue reached CNY1.3 billion (USD189 million), accounting for 84 percent of the total.

In recent years, Zhongxin Environmental has faced anti-dumping and countervailing investigations from the US and Canadian governments. The final ruling in the US probe effectively blocked imports of Chinese-made products, while the preliminary ruling in Canada greatly raised the cost of entering the market for Chinese-made products.

To respond to changes in the international trade environment, Zhongxin Environmental has invested USD130 million in Thailand since November 2023 to build a biodegradable tableware production plant. The project has a designated annual output of 100,000 tons, having reached 75,000 tons at the end of last year.

Moreover, the company announced in January plans to invest up to USD36 million to build a new factory in Pennsylvania, the US, with an annual production capacity of 20,000 tons.

Zhongxin Environmental also released its earnings report for the first three quarters of the year yesterday. Its revenue climbed 38 percent to CNY1.5 billion, and its net profit widened 58 percent to CNY312 million (USD46.8 million) from a year earlier. In the third quarter alone, revenue rose 47 percent to CNY558 million and net profit surged 45 percent to CNY117 million from the same period last year.

Editor: Futura Costaglione