November 4, 2015 Updated 11/4/2015
Chinese plastic tableware maker Fuling Global Inc. plans a significant expansion of its factories in China and the United States, using $ 20 million from a Nov. 4 initial public offering on the U.S. Nasdaq market.
Fuling said in the IPO filing it will spend $ 9.5 million to build a new factory in China, its fourth there, and more than $ 7 million to expand its factory in Allentown, Pa., and build its U.S. sales network.
The company is trading under the stock ticker symbol “FORK.”
The Wenling -based firm said it’s one of China’s three largest exporters of disposable serviceware, and it opened the Pennsylvania factory, its first outside China, earlier this year.
It said in the IPO it was listing on the U.S. market as a way to “find new opportunities in our most important market” and it hoped that the “increased transparency required of public companies” would boost confidence its customers have in the company.
More than 90 percent of its $ 83 million in annual sales last year were to customers in the United States, including fast food restaurants like McDonald’s and Subway, and retailers such as Wal-Mart. The company reported net profit of $ 7.7 million in 2014.
Fuling last year announced plans to open the Allentown factory, and it said the U.S. operations would make straws and potentially cups, which are more costly to ship from China because they do not pack as well and require shipping empty space.
It said the Allentown plant has high capacity automation equipment, but it also said that it anticipated that a “significant portion” of its products would continue to be made in China, particularly if manufacturing cannot be as automated or if they can be packed tightly for shipping.
“For those low-volume, multi-variety, multi-specification orders, we will continue to send them to our factories in China so we can take advantage of lower labor costs,” the company said.
The firm said it will use $ 9.5 million from the IPO, plus $ 4.5 million from other sources, to build a factory in Wenling, China.
In the United States, Fuling said it would use $ 3.3 million from the IPO for further develop the Allentown factory, and $ 3.9 million for factory operations, including working capital, and developing its U.S. sales network, including setting up additional logistics centers in Chicago and Dallas.
“We are optimistic about the future of our Allentown factory, and we think this model will be mutually beneficial for both Fuling and our U.S. customers,” it said in the IPO.
The firm also said it would spend $ 1 million from the IPO on research and development of process automation.