The Group continued to maintain a strong customer base. As at 30 June 2005, the Group had over 5,500 customers in 30 provinces and municipalities in the PRC and had approximately 560 customers in 20 countries, representing an increase of 37.5 percent and 40.0 percent respectively when compared with the first half of 2004. Such growth is due to the Group's expansion in the domestic and overseas markets as well as strong market demand.
With respect to the protective measures adopted by the United States and the EU, Chairman Zhang Bo expressed that "These factors will have a limited impact on the Group primarily because Weiqiao Textile is positioned in the upstream sector and these protective measure are aiming at downstream products such as fashion. Weiqiao Textile's domestic customers mainly sell their products in the Chinese domestic market and in 'non-quota' regions. They believe that, in the long-run, the elimination of quotas will benefit consumers globally as well as a highly competitive company like Weiqiao Textile."
China has been experiencing regular electricity shortages. Although the Group benefited from stable electricity supply from its parent, Shandong Weiqiao Chuangye Group Company Limited, electricity prices continued to increase. In order to ease the pressure arising from increasing electricity cost, the Group announced, on 13 August 2005, an Asset Transfer Agreement with its parent for the purchase of its parent's electricity assets.
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