Rechi lands orders from Midea for 400,000 compressors

Taipei, Dec. 5, 2003 (CENS)--Rechi Precision Co. Ltd., a subsidiary of the Sampo Group, has reportedly obtained orders of more than 400,000 air compressors from Midea Group, mainland China's largest manufacturer of air conditioners.

Over the past several years, Rechi has been making all-out efforts to deploy in the mainland market. In the past few months, the company acquired orders from mainland China's Haier Group and TCL Group for air compressors.

It is estimated the mainland currently demands 20 million air compressors per year. Rechi said it would vie for orders for over two million air compressors this year.

Rechi boasted it would challenge to win orders for five million air compressors between July 1, 2003 and June 30, 2004). To meet the increase of orders, Rechi will expand production capacity and plans to cooperate with TCL Group to set up a grinding plant in Huizhou, Guangdong Province.

The proposed joint-venture plant in Huizhou will be designed to have an annual production capacity of five million pumps for air compressors. With the pilot production of the proposed plant, Rechi will be able to see annual output reach nine million air compressors within the next three years, becoming one of the world's top-three manufacturers in this line.

Rechi president Lee Wen-chin said mainland's three largest manufacturers, Midea, Gree and Haier, account for over half of the total sales of air compressors in the mainland market. To meet the increased orders from the three largest manufacturers, Rechi is squeezing out new production capacity.

The company said it has received orders for five million compressors in the current fiscal year ending June next year, including two million from the mainland, 1.55 million from the U.S., 400,000 from Taiwan, 200,000 from Japan, 250,000 from South Korea, and 500,000 from the Middle East and the rest of the world.

Based on orders received, Rechi has become the world's fourth largest manufacturer of compressors. Last year, Matsushita Co. ranked first with total sales of up to 10 million compressors, followed by LG with close to 10 million, Hitachi Shanghai with six million, and Toshiba with four million.

Rechi boasted it raked in pretax earnings of NT$16.48 million (US$484,700 at US$1:NT$34) in October, up 10.75% from NT$14.88 million (US$437,640) posted in the same month of last year. The company had cumulative earnings of NT$212.91 million (US$6.262 million), or NT$1.05 (US$0.03) per share, in the first 10 months of this year, reaching 88.3% of its annual profit projection.