According to a statement made by the chairman of Richina Pacific Limited (RPL), John Walker, a New Zealand-based company involved in a range of industries including finished leather manufacturing in New Zealand and China, after tax operating profit increased by 228% to US$8.18 million for the financial year ending December 31, 2004, and is to resume dividend payments after a gap of six years.

The turnaround performance by Richina Pacific was greatly assisted by the acquisition of a controlling 90% interest in Shanghai Leather Corporation (SLC), which brought more than 50 different business enterprises into RPL.

The acquisition has significantly changed the dynamics of Richina Pacific and presents the company with many new challenges as well as opportunities and its future performance will be far less dependent on any one business segment.

To assimilate the diversified SLC into Richina Pacific, the company is in the process of restructuring its divisional segmentation, and will appoint additional management. A further announcement on a number of initial appointments will be made shortly.

Total consolidated revenues for Richina Pacific in 2004 were US$430.9 million, an increase of 47% over the previous year. Total consolidated assets were US$217 million, up 106% over the previous year-end.

Within the Shanghai leather operations, the bovine shoe leather division continued its growth path of recent years and made a strong contribution. However, the anticipated on-budget start-up costs associated with the automotive leather operation, and losses by the upholstery and ovine garment divisions, reduced margins.

Directors are reviewing the business plans of the upholstery and garment divisions and anticipate that acceptable returns will be generated from all leather sectors in the years ahead.

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