Sino Techfibre, the producer of microfibre, polyurethane (PU) synthetic leather and pattern moulding paper (PMP) in China, today announced that it registered a net loss of RMB51.5 million ($10 million) for the three months ended 30 September 2010, on the back of a 7.4% rise in group revenue to RMB279.2 million.

PU synthetic leather continued to be the group’s largest contributor of total revenue, comprising 45.2% (9M2009: 46.3%), whilst microfibre synthetic leather accounted for 39.8% (9M2009: 36.9%), and PMP made up the remaining 15.1% (9M2009: 16.8%).
Sales contribution from its major customer — The People’s Liberation Army and the government sector – rose to 36.0% of total sales (9M2009: 18.9%).

Li Wenheng, Sino Techfibre’s Chief Executive Officer, says: “Due to the rising cost of labour and competition of labour force in China, we loss significant number of staff and front line managers since August. Our third quarter performance would have been much better, had it not been for the resignation of a significant number of staff since August this year, some of them engineers specialising in the production of premium PU and microfibre products. We responded quickly to the situation and managed to replace some of them. However, these new employees are not as experienced in the production of premium products, and as such, would require a few more months to move up the learning curve. Meanwhile, we are working hard at filling the remaining open positions at the factory, particularly the mid-level engineering staffing.”

In view of the current situation, the group says it expects to incur a loss in 4Q2010 as well.