Far East Machinery Transforms into Holding Company

The 1949-founded Far East Machinery Co., Ltd. will spin off its four affiliates this year into independent companies as the first step of its plan to transform into a holding company in line with its business diversification strategy, according to  chairman, K.H. Chuang.

Headquartered in Chiayi, southern Taiwan, the machinery manufacturer runs pipe & tube, steel golf shaft, and engineering affiliates, which together generated revenue of over NT$7 billion (US$233.3 million) in 2012 and NT$6 billion (US$200 million) in 2013.

Its machinery affiliate supplies bed-type lathes, vertical lathes, bed-type boring/milling machine tools, machining centers, and complete specifications of wheel processing machines, which has become its foremost niche product. Throughout 2013, the company received orders for over 150 wheel making machines from China's wheel heavyweights, including CITIC Dicastal Co., Ltd., more than double the amount it received in 2012.

FEMCO opened Factory Automation Technology (FATEK) in 1994 to handle its machine-tool operation, including promoting the  “FEMCO” brand.

The company set up steel golf shaft affiliate FEMCO Steel Technology (FST) in 1993. FST counts TaylorMade, Callaway, Cleveland, Mizuno, Nike, Ping, and Titleist among its foremost customers. In China, the unit supplies shafts to manufacturers of tailor-made golf clubs, including Southwest Golf, Advanced Golf, Fusheng, Sino Golf, Dynamic, and Jackson. Far East Machinery has become the world's No.2 supplier of steel golf shafts by volume, promoting “KBS” and “FST” brands.

FEMCO Pipes & Tubes produces pipes for marine construction, oil & gas, petrochemical, construction, and air conditioning, with the affiliate generating around 70% of FEMCO's revenue. The company was the sole supplier of U-rib steel structure used in the Wugu-Yangmei elevated section of the National Highway No.1, opened in April 2013.

The company's engineering affiliate FEMCO Manufacturing Applications supplies solutions to public-work projects, being the primary assembler of the power generation systems for an NT$8.3 billion (US$276.6 million) hydro-power plant in Nantou County, central Taiwan, which recently begun operation.

Chuang notes that machinery and machine-tool business will increase to account for half of the company's total revenue after the company becomes a holding company, for which the company will invest around NT$600 million (US$20 million) to construct a new factory on 12,000-plus square meters at Minsyong Township, Chiayi County, in addition to developing a full range of machining centers by adding small and big machines and developing a full range of lathes. The company plans to go public by listing its machinery business in two years. (KL)