Machine Tool Maker Tongtai Set for Bullish 2015 on Ample Orders from Auto and Aircraft Sectors

Industry executives project Tongtai Machine & Tool Co., Ltd., a leading machine-tool maker in Taiwan, to generate consolidated revenue in excess of NT$10 billion (US$322.58 million) this year, an increase from 2014's NT$9.13 billion (US$294.58 million).

The bullish forecast is based on swarming orders that the company has recently received from carmakers and aircraft builders worldwide. They believe the generally robust car and aircraft industries to keep Tongtai's production lines humming throughout Q2, 2015.

Some 75 percent of the supplier's sales is from machine tools and the remainder electronics equipment.

Chairman J.H. Yen says the company will step up  efforts this year both in product sales and finding new customers at trade shows, including participation in the Taipei International Machine Tool Show 2015 (TIMTOS) held in March and the EMO 2015 in October in Germany.

In the meantime, it will rev up sales efforts in America, where it signed up two big dealers last years. Industry executives are optimistic about the company's sales stateside for an increasing number of overseas American manufacturers have moved production home.

Tongtai is predicted to see revenue from sales in America to surge 50 percent this year from last year's NT$200 million (US$6.45 million) or so.

The company still has around NT$1.7 billion (US$54.83 million) of booked orders to fill its production capacity throughout the first quarter and to be delivered by April.

Industry executives put the company's after-tax net income for 2014 at NT$2.8 per share based on NT$2.1 per share income posted throughout the first three quarters. In 2013, the company netted NT$1.23 per share.

Yen notes that machines for car and motorbike industries accounted for 35-40 percent of corporate 2014 sales, compared with 25-30 percent contributed by machines for electronics industries.

He says China and Taiwan were the company's top markets last year to account for 65-70 percent of corporate sales, with the rest of Asia contributing 15-20 percent to 2014 corporate sales.

The company is expanding production, aiming to become one of the world's top-20 machine-tool makers by 2020. It will begin to construct a factory on 66,000-square-meters at the Southern Taiwan Science Park (STSP) this year, with the  first phase set to begin at the end of February at a cost of NT$600 million (US$19.35 million).

The new plant will make horizontal machining centers, horizontal boring/milling machines, and heavy-duty double-column machine tools, generating an estimated NT$4 billion (US$129.03 million) a year once in full production.

(KL)