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Tongtai's 2015 Revenue Forecast to Rise 20-plus-percent to US$323 Bn.

2015/04/23 | By Ken Liu

Industry executives forecast the consolidated revenue of machine-tool maker Tongtai Machine & Tool Co., Ltd. of Taiwan to rise over 20 percent year on year to NT$10 billion (US$322.58 million) by the end of this year, basing such optimistic prediction on the sustained growth in global demand for automobiles and aircrafts and the company's acquisition of PCI-SCEMMA of France, with the French maker projected to begin contributing to the parent company's bottom-line in the third quarter of this year.

Tongtai took over full ownership of PCI-SCEMM in March this year from PSA Peugeot Citroen, a French multinational manufacturer of automobiles and motorcycles.

Last year, the French machine-tool maker's revenue increased by an equivalent of NT$1 billion (US$32.25 million), with gross margin of 5 percent or so.

Industry executives estimate PCI-SCEMM will not begin to generate revenue for Tongtai until the third quarter this year, at a rate of NT$80 million (US$2.58 million) a month to bring the total to NT$500 million (US$16.12 million) by the end of this year, mainly due to the adaptation period needed for the two companies to achieve synergy.

PCI-SCEMME will attend as a Tongtai affiliate at the 14th China International Machine Tool Show (CIMT), to run from Apr. 20 through 25 this year in Beijing.

Tongtai Chairman J.H. Yen points out that PCI-SCEMM's management team will meet with Tongtai's customers and agents at the Beijing show to build contact with Tongtai's distributors in Asia to boost the French affiliate's market share in Asia. Tongai's acquisition enables adoption of PCI-SCEMM technology as a calling card to bring potential customers onboard.

At the show, Tongtai will mostly exhibit its latest machines for the automotive and aircraft industries.

Tongtai's revenue for the first quarter slipped 3.15 percent from the same quarter of last year to NT$1.78 billion (US$57.51 million) due chiefly to the weeklong Chinese New Year holidays in February, during which all shipments were postponed with most workers on a break.