Victor Taichung Machinery to Start from Scratch in 2014 After Restructuring

Victor Taichung Machinery Works Co., a major machine-tool maker in Taiwan, projects to boost  consolidated revenue to over NT$10 billion (US$322.58 million) by 2015 from the estimated NT$9.18 billion (US$296.12 million), with ambitious expansion plans for  operations in Taiwan and China.

The investment plans come after its successful restructuring announced in 2013 by a local court.

The maker, founded in 1954, fell into financial difficulty in 1998 as a bank froze its line of credit due suspicion that the firm was borrowing to shore up stock price instead of financing manufacturing. 

 In 2000 a court ordered the company to restructure and repay debt of NT$6.7 billion (US$216.12 million) by 2018, but settled to accept repayment of  only half of its debt in installments. 
 

Improving sales have allowed Victor Taichung to repay its loan by April 2013. In October of that year, the court decreed that the company had completed its restructuring and instructed it to re-elect boards of directors and supervisors. 
 

The investment plans will see the firm spend NT$3.28 billion (US$105.80 million) in Taiwan to build a new facility on 3.1 hectares in the Taichung City Precision Machinery Innovation Technology Park, with construction to begin in 2015 and be completed by 2017. 

The new plant will be Victor Taichung's global operations headquarters, R&D center, and primary plant, to generate annual revenues of NT$6 billion (US$200 million) initially and up to NT$10 billion (US$333 million) when  fully operational. 
 

The plant will be high precision and outfitted with advanced  equipment from Europe, America, and Japan to produce high-speed, high-precision, intelligent, heavy-duty, combo machines. 
 

In China the company will invest US$19 million in a brand-new factory on 53 acres in the Shanghai Qingpu Industrial Park, with volume production to begin  mid-2015 with annual output of 2,500 machines and annual revenues of NT$6 billion (US$200 million) once fully operational.

Bert Huang, company president, said the company will start from scratch and focus on development of smart-automation and production-line systems in addition to boost after-sale service quality.

Estimating its revenue for 2014 to rise 8% or so from 2013, the company has begun vying for orders to fill capacity for Q1, Q2 of 2015. A de-listed company, Victor Taichung Machinery Works said it had consolidated revenue of NT$1.8 billion (US$58.06 million) in Q1, 2014, up 22% year on year, with Q2 revenue still growing, and undelivered orders totaling  NT$1.2 billion (US$38.70 million).
 

Huang notes that in addition to persistent recovery in global car, aircraft and energy industries that have driven its shipments throughout 2014, Taiwan's domestic market for machine tools has climbed due to growing demand from automakers, bicycle makers, hardware makers and motor makers returning from  China.

Domestic demand has increased to fill 50% of its order books. In the meantime, its shipment to China has dwindled to around 10% from the peak 40% due to surging labor cost there, to have driven many of its Taiwanese customers to migrate to Southeast Asia from China.

Rising labor costs force  manufacturers in China to turn to more automated machines, providing Taiwanese equipment manufacturers opportunity to develop smart-automation and production-line systems.

Huang says his company will meet such demand by adding more functions, axes, and precision. (KL)