|Following the recognition by the Mobile Wireless Communication Busines Division of Samsung in September 2010 as a qualified supplier of low-smoke halogen free insulating materials, our halogen free insulating materials new product continues to gain momentum by managing to secure recognition by another major global mobile phone supplier, LG in December 2010. We expect to commence sale of such product to LG beginning in Jaunuary 2011 and this signifies an important and positive start for our low-smoke halogen free insulating product as such materials began to be increasingly applied by players in the global high-end consumer electronics industry.
Low-smoke halogen free insulating materials are typically used for cable jacketing and its advantages over conventional plastics materials include (i) does not contain potentially toxic chemicals such as halogen, lead, cadmium, chromium and mercury; and (ii) do not produce a dangerous gas/acid combination or toxic smoke when exposed to flame while maintaining desirable characterics in terms of flexibility, tensile strength and weather resistance etc.
With its favorable product attributes and relatively friendly impact on the environment, low-smoke halogen free insulating materials are expected to gradually replace conventional plastic materials to be used in cable jacketing for products manufactured by global leading consumer electronics manufactures. Through years of research and development and preparation, our group is now capable of developing and manufacturing our own low-smoke halogen free insulating materials and commencing from November 2010, will focus its production in our Weihai and Changshu facilities. We firmly believe in the prospects of such enviornmental friendly materials and our ability to capture a larger market share going forward and for Samsung, our target is to be able to supply up to 40% of their total low-smoke halogen free insulating materials procurement volume next year. Based on initial customers feedback, we expect low-smoke halogen free insulating materials to begin contributing positively to the Group’s revenue and profitability in 2011.