Teco's Motor Business Revved up by American Shale Oil Production

With brisk shale oil production spurring considerable market demand for motors in the U.S., Taiwan-based Teco Electric & Machinery Co., Ltd., an established maker of such products in Taiwan, has seen its shipments steadily grow to become a major  in the country.

C.K. Liu, Teco's chairman, notes that with "fracking" technology continuously advancing to raise  output of American shale oil, so has strong demand for motors. This boom, Liu adds, has conveniently benefited his company, simply because Teco's American headquarters being in Texas, the country's largest shale oil producer.

Motors for shale oil production are generally massive, being over 5,000 horsepower and 10 tonnes that are major models in Teco's motor lineup. The Taiwanese firm is the world's third-largest mid-to-large motor supplier by shipment.

Teco will also gain strong growth momentum from the Japanese market for IE3 high-efficiency motors in the years ahead. With the Japanese government to ban  sale of conventional motors and promote IE3 motors starting in 2015, Teco has recently witnessed orders from the country for such products significantly surge. The company looks to triple the shipment of this year and annual revenue of NT$1.2 billion (US$40 million) in Japan next year, targeting to become the largest foreign supplier of motors in the country in the short term.

Teco emphasizes that patented technology and competitive prices are key to effectively penetrate the Japanese market for IE3 motors, with such successful experience to help explore Europe and China, which will also require  using IE3 motors by 2015 and 2016, respectively.

Teco finished the first three quarters of this year with revenue of NT$41.224 billion (US$1.37 billion), net profits of NT$3.645 billion (US$121.5 million) and EPS (earnings per share) of NT$1.71 (US$0.057), mainly driven by its motor business. (SC)

Teco's Performance in 2014 by Quarter
Quarter	Q1	Q2	Q3
Revenue	NT$13.645 Bn.	NT$14.108 Bn.	NT$13.350 Bn.
Net Profits	NT$861.25 M.	NT$1.470 Bn.	NT$1.034 Bn.

Source: Market Observation Post System