The Urethane Blog

Headway Growth Driven by Water Based Polyurethanes

Headway forecasts 10% to 15% revenue rise

By Aileen Chuang  /  Staff reporter

Headway Advanced Materials Inc (展宇科技) yesterday said its environmentally friendly products and strategic plans in the Asia-Pacific region are expected to drive revenue to grow by between 10 and 15 percent this year.

“Our environmentally friendly products accounted for 42 percent of our revenue last year. It is expected to contribute more than 50 percent of revenue over the next three years,” Steven Cheng (鄭智文), general manager of the petrochemical material supplier, told an investors’ conference.

Headway said that it was one of the first firms to develop — in 1988 — water-based polyurethane (PU) products without harmful substances, adding that it has the broadest applications among its peers.

It mainly produces PU resin and thermoplastic polyurethane (TPU), which is used in downstream products such as footwear, furniture, functional fabrics, leather and building materials.

Footwear and furniture products accounted for 49 percent and 27 percent respectively of sales last year, company data showed.

“With major players in the footwear and textile industries from 19 countries forming an alliance — Zero Discharge of Hazardous Chemicals — in 2011 to forbid their supply chains and products from using harmful substances, we were already fully prepared for this,” Cheng said, adding the players include its main clients Nike, Adidas and Puma.

Cheng said that its main product, water-based PU, would continue to replace traditional PU and drive growth with the promotion of the alliance and other international organizations.

“We expect to expand the production capacity of our water-based PU from 200 tonnes per month to 300 tonnes per month by the end of this year,” Headway president Sinoese Han-yin Liou (劉漢瀛) said.

The Hsinchu-based company tapped the China market in 1993 and Vietnam in 2004. It has expanded its operations in China and Vietnam, as well as reaching into India and Indonesia.

The company said it plans to expand its plants in Vietnam, elevate capacity utilization in Shanghai and add more production lines for its TPU products this year.

“We aim to provide technical services instead of competing over price in the Asia-Pacific region,” Cheng said, adding that the company plans to become a comprehensive urethane solution partner.

Headway last year reported revenue decreased 7.3 percent to NT$2.29 billion (US$70.97 million) from 2014 because it had to lower its prices due to decreasing crude oil prices. However, shipments remained flat over the same period.

Net income last year increased 51.8 percent annually to NT$129 million, with earnings per share rising from NT$1.38 to NT$2.1.

Headway was founded in 1976, entered the stock market in 2004 and is to become a listed firm on May 9.