Machine Tool Maker Tongtai to Acquire an Austrian Peer

The Tongtai Group will soon acquire an Austrian machine tool maker after a number of overseas acquisitions that are part of the plan to increase revenue to NT$10 billion (US$322.58 million) this year. To realize the full takeover, the Taiwanese machine-tool maker has recently set up the Austrian subsidiary Tongan GmbH for €10.8 million (US$12.09 million).

The Austrian machine-tool maker specializes in machining centers for processing automotive parts and components for automation systems, mainly shipped to buyers in Europe, America and Japan.

Tongtai projects the Austrian maker to help boost revenue from the group's European operations to account for 20 percent of the group's total revenue, up from the current 13-15 percent. Tongtai is expected to begin listing the Austrian maker's revenue in its bookkeeping as early as this July.

The latest acquisition follows the company's full takeover of PCI-SCEMM, the machine-tool unit of the French business group PSA, which specializes in making horizontal-type machining centers, linear and circular conveying units and special-purpose machines for automotive and aircraft industries.

Tongtai executives conceded that the group listed tens of millions of losses in April from foreign exchange transactions, but the group's April operation remained profitable, and that the losses decreased in May due to recent depreciation of the NT-dollar against U.S. dollar.

The executives say the group has received declining orders that cut 2.34 percent year on year the group's consolidated revenue for the first four months of this year, to NT$2.49 (US$80.61 million).

In May the company won NT$280 million (US$9.03 million) of new orders and delivered over NT$300 million (US$9.67 million) of machines. It still has NT$2.05 billion (US$66.12 million) of undelivered orders and has begun trying to fill up the company's September production capacity.