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Rexon to Start Up New Manufacturing Base at End of This Year in China

2014/06/23 | By Steve Chuang | REXON INDUSTRIAL CORP., LTD.

Rexon Industrial Co., Ltd., a Taiwanese contract manufacturer of bench power tools and fitness equipment, will start up its new manufacturing base in China's Zhejiang at the end of this year, according to its president, Casey Wang.

Wang says that the said plant, including a brand new headquarters, will occupy some 103 hectares and turn out RMB1.2 billion (about US$200 million) worth of bench power tools for woodworking annually, mostly to be sold in  the domestic market.

In addition, Wang says, Rexon also plans to set up a new production line for fitness equipment in China, scheduled to start rolling in 2016, when the company will likely launch its own brand to promote such products in the country.

In fact, Rexon has been a contract manufacturer of fitness equipment for U.S.'s prestigious brands, including Life Fitness, True and Precor, for years, hence gradually enhancing its presence in the mid-to-high-end segment of commercial models. The firm's shipment of high-margin fitness equipment notably increased to contribute nearly 25% to annual consolidated revenue of NT$3.287 billion (US$109.6 million) last year, when its net profits and full-year EPS (earnings per share) totaled NT$205 million (US$6.83 million) and NT$1.14.

Rexon is very likely to see the contribution rate of sports equipment to annual revenue keep surging this year, as it continues to expand output. For instance, the maker is scheduled to activate its brand new production line, mainly for making True's fitness gear, at the end of June, to drive overall monthly output value by NT$30 million (US$1 million) after reaching full capacity.

The company reported consolidated revenue of NT$280 million (US$9.33 million) in May, down 11.6% monthly but up 22.9% yearly, and posted cumulative consolidated revenue for the first five months of this year of NT$1.271 billion (US$42.36 million) for an increase of 5.2% over NT$1.207 billion during the same period of last year.

With Rexon's shipments of power tools and fitness equipment steadily increasing, institutional investors project the company's performance in the second quarter to significantly grow from the first quarter. (SC)