Taipei, Feb. 13, 2008 (CENS)--To counter risks likely to be generated by possible raw-material price hikes, some auto-parts manufacturers in central Taiwan have been strengthening their management to upgrade competitiveness and flexibility.

Chian Hsing Forging Industrial Co., Ltd., for example, has decided to procure four sets of heavy-duty pressing machines to build an automated production line, which is expected to help boost the firm`s revenue by 20% this year.

Hota Industrial Manufacturing Co., Ltd., a major maker of precision gears and transmission parts, is actively planning to adjust down the inventory of raw materials, semi-finished products and finished products to 3.5 months from about six months before.

By winning big-ticket orders from major automakers and first-tier parts suppliers in Europe and the United States, Hota enjoyed rapid sales growth in the past three years. But the company is also required to keep abundant inventories, which is not ideal for a company`s sustainable operation.

David Shen, chairman of Hota stressed that his company`s operation focus in 2008 is to lower inventory level and account receivables, which averaged at about NT$1.6 billion (US$49.23 million at US$1: NT$32.5) per year in the past and is expected to be lowered by 25% this year.

In addition, Shen said that his company is also trying to shorten the period needed from material procurement to finished products to 1.5 months from around three months currently.

As a result of such efforts, the chairman said, Hota`s revenue growth in the first half of the year is expected to reach 20%, lower than that in the past few years. But the figure is expected to rebound to 30% in the second half.

Chian Hsing claimed that its revenue is expected to grow 20% this year due to new orders from Japan`s Shinkansen railway construction works for railway accessories and WIA of South Korea for transmission shafts. Limited by its fully utilized capacity at its plant in Taichung, the company decided to upgrade its automated production processes by procuring four new heavy-duty press machines, which are scheduled to join production in the first quarter to boost production efficiency and cut costs.

(by Quincy Liang)