(Yicai) Aug. 4 -- Shares in Walrus New Material plunged by the exchange-imposed daily limit today after the Chinese producer of polyvinyl chloride flooring said it will temporarily suspend production at its Vietnamese factory as new US import rules have heightened the risk of its exports to the US being detained by US customs.

Walrus’ share price [SHE:003011] plummeted 10 percent to CNY28.88 (USD4).

US Customs and Border Protection now requires PVC flooring importers to submit material traceability documents that allow the raw materials used to be tracked, the Haining, southeastern Zhejiang province-based company said yesterday.

Walrus’ Vietnamese subsidiary is cooperating with importers to prepare the necessary traceability documents and is waiting for feedback from US Customs and Border Protection, it added.

In the meantime, the firm is halting production in Vietnam and will recall products that have already been shipped to avoid them being seized by customs, it said.

Walrus is unable to say when production at its Vietnamese plant will resume as it does not know how long it will take to go through the process, it said. But the suspension will have an impact on its performance this year.

Walrus is one of China’s leading manufacturers and exporters of PVC flooring and the plant in Vietnam is a major production base. The Vietnamese unit accounted for just over half of Walrus’ profit last year at CNY109 million (USD15 million) and 43.8 percent of revenue at CNY829 million (USD115.4 million), it said.

Walrus, which supplies foreign home improvement firms such as the UK’s Kingfisher and Germany’s Hornbach and flooring companies such as Beaulieu Canada, is doubling its PVC flooring capacity in Vietnam to 30 million square meters this year, a company executive said earlier this year. In China it produces 18 million sqm a year.

Rival Tianzhen Technology has been badly affected by US customs’ requirements for additional clearance materials. The PVC flooring supplier logged a 43.8 percent plunge in net profit in the first quarter from a year earlier and a 80.2 percent dive in revenue due to delays in clearing customs in the US, the Hangzhou-based firm said in response to a letter of concern from the Shenzhen Stock Exchange back in May.

Editor: Kim Taylor