Chin Fong ties up with IHI to tap international market

Taipei, Nov. 5, 2003 (CENS)--Chin Fong Machine Industrial Co., Taiwan's largest producer of pressing and forging machines, yesterday signed a cooperation agreement with Ishikawajima-Harima Heavy Industries Co. (IHI), Japan's largest producer of heavy machinery, to set up IHI-Chinfong Press Engineering Co., Ltd. (ICPE) in Changhua City, central Taiwan.

Both sides will invest 100 million Japanese yen to set up ICPE in the initial stage, with Chin Fong taking a 30% stake and IHI holding the remainder. ICPE will serve as a logistics center for both sides to carry out research and development, design, and marketing operations.

The cooperation project between Chin Fong and IHI will be implemented in three stages. At the first stage, both sides will collaboratively vie for international orders and focus on technology transfer. At the second stage, they will increase ICPE's paid-in capital to between 400 million and 500 million Japanese yen to set up production facilities. At he final stage, both sides will boost the venture's paid-in capital up to one billion Japanese yen to produce large-sized pressing machines.

The pact signing ceremony was held at Chin Fong's headquarters in Changhua and jointly presided over by Chin Fong chairman C.B. Chi and IHI CEO & president Mototsugu Ipo. Participants in the ceremony included Vice Economics Minister Shih Yen-shiang, Changhua County magistrate Weng Chin-chu, Taichung Harbor Bureau director Hsieh Ming-hui, Taiwan Association of Machinery Industry chairman Fred Huang, and 100-some representatives from the domestic industrial sector.

With an annual sales turnover of NT$300 billion (US$8.82 billion at US$1:NT$34), the 150-year IHI is a specialist manufacturer of engines for jet airplanes and ships, power generators, pressing machines, and air compressors, etc. The company has maintained cooperation relations with Taiwan's state-run enterprises, including Taiwan Power Company, China Steel Corporation, and China Shipbuilding Corporation.

C.B. Chi said ICPE will be poised as the global logistics center for both sides and will launch a production facility in the Taichung Harbor area to produce large-sized pressing machines.

"Our cooperation with IHI will be complimentary for both sides because we focus on the production of the pressing machines with operating capacity of less than 2,400 tons while the Japanese partner concentrates on the heavy-duty pressing machines with operating capacity of more than 6,000 tons," Chi noted. "Thanks to the cooperation ties, IHI has promised us to introduce cutting-edge technology for the production of sophisticated pressing machinery, which will help upgrade Taiwan's heavy-machinery industry."

"In view of the prosperous development of the automobile industry in mainland China, we acknowledge that Japanese manufacturers of pressing machines cannot stick to sales of Japanese brands and should rather build strategic alliances with overseas manufacturers to tap the wider international marketplace," Ipo said.

By cooperating with Taiwan's largest manufacturer of pressing machines, IHI will make all-out efforts to develop high-class pressing machines for the automobile industry worldwide.


At the signing ceremony, Shih said Taiwan, the world's fifth largest producer of machine tools, would see its production value of machine tools enjoy an annual growth of 15% to reach NT$70 billion (US$2.05 billion) this year.

Established 56 years ago, Chin Fong specializes in the production of mechanical presses, crank presses, knuckle-joint presses, and high-speed pressing machines. The company currently has two heavy-machinery plants in Changpin Industrial Zone in Changhua County. Over the past several years, the company has extended production operations overseas by operating a subsidiary in Ningbo, Jiangsu Province, mainland China, setting up Stametec Co. in the Tennessee state of the U.S., and acquiring Smikura Co. of Japan.

Chin Fong estimated it would score NT$4 billion (US$117.64 million) in sales revenues worldwide this year. The company will challenge a revenue goal of NT$5 billion (US$147.05 million) next year.