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Taiwan Golf Club Makers Diversify to Overcome Market Slump

2014/10/22 | By Steve Chuang

To assure sustainable development as market demand cools down, Taiwan's top three contract suppliers of golf clubs--the Advanced International Multitech Co., O-Ta Precision Industry Co., and Dynamic Precision Industry Corp.--are moving in different directions in search of diversification. Their efforts are gradually paying off.

As its golf club made of conventional carbon-fiber composites may have reached their growth limit, Advanced International began developing new materials in cooperation with Taiwan's National Cheng Kung University two years ago in an effort to find new ways to stimulate its overall performance. The result of this cooperation is continuous vapor grown carbon fiber, which is notable for having more than five times the heat-sinking performance of the copper that is commonly used as a heat-sink material. The new material can be used with general lighting, medical lighting, sports lighting, thawing boards, butter knives, and many other products.

Advanced International has reportedly been in talks with several customers interested in the new material, and plans to begin mass-producing it next year at the earliest. The company believes that this cutting-edge product will generate 10 to 50 times the margins of its existing product lineup, and will contribute considerably to its performance within one to two years.

The company recorded revenues of NT$589 million (US$19.63 million) in September, up 24.5% month-on-month (MoM) but down 12.9% year-on-year (YoY). For the first nine months its revenue totaled NT$6.896 billion (US$229.87 million), a 16.6% drop.

O-Ta has ventured into the field of art by spending NT$28.8 million (US$960,000) to buy a 10% stake in the Chichin Art Ceramics Company, a listed startup that owns Taiwan's only artist-run brand, “1300 Only Porcelain.” O-Ta aims to use ChiChin Art's industry-leading porcelain sculpting techniques to complement its own core competencies, which include die casting, forging, and surface finishing, and develop competitive art metal products that can further drive its performance.

The company's September revenue reached NT$453 million (US$15.1 million), surging by a sharp 62.9% MoM and 13.2% YoY. Its January-September revenues of NT$2.752 billion (US$91.73 million), however, were down by a marginal 0.62% YoY.

Drawing on its superior die casting technology, Dynamic Precision has extended its business into precision parts and components for aerospace use and has succeeded in garnering a trial order for such products, hopefully bolstering diversification and strengthening sustainability.

The company raked in revenues of NT$86.84 million (US$2.89 million) for the month of September, up a steep 69.8% MoM but down by 39.9% YoY. The firm finished the first nine months of 2014 with total revenues of NT$1.342 billion (US$44.73 million), a YoY drop of 6.9%. (SC)