"We're already well integrated with Invention Sanitary but this [the acquisition] will just make that linkage even better - we'll control the full supply chain now, which is a major benefit for us," Fala said.
Capturing additional manufacturing margin from owning the plant would also make Methven more competitive.
"We're very confident now that with that manufacturing margin we can compete internationally," Fala said.
Invention Sanitary would move into a new, 14,000sq m factory in Heshan - three times the size of its existing site - in October.
He said the Chinese plant employed 130 staff - slightly more workers than Methven's New Zealand operation.
A Methven staff member would go to China to act as the factory's general manager following the purchase.
Meanwhile, he said trading conditions were improving, particularly in this country, although business was tough in Australia, where the market was being hit by heavy discounting that impacted margins.
The company reported a net profit of $5.1 million for the 12 months to March 31 this year - a 20.3 per cent decline on the 2012 result.
Shares closed up 3c at $1.30 last night.
