Machine tool makers busy filling orders in Q4

Taipei, Sept. 29, 2003 (CENS)--Thanks to the influx of orders from domestic and mainland China markets, Taiwan's large-sized manufacturers of machine tools have seen their production capacity fully booked through the end of this year.

Taiwan's leading machine tool makers, including Tong-Tai Precision Machine & Tool Co., Victor Taichung Machinery Works Co., Leadwell CNC Machines Mfg. Corp. and Kao Fong Machinery Co., boasted they would see sales turnover grow by between 20% and 70% this year from last year's level.

"Due to the substantial sales growth in domestic and mainland China markets, we have received orders worth over NT$300 million (US$8.87 million at US$1:NT$33.8) for shipment in the fourth quarter," said Chan Chih-cheng, president of Kao Fong. "The orders we have received will keep our production line busy through the end of this year. Because of the continued influx of orders, we will challenge NT$1.5 billion (US$44.37 million) in sales turnover this year, up 70% from last year."

Seeing the booming demand for machine tools by the mainland's automobile and motorcycle industries, Kao Fong boasted its annual sales will top more than 300 machine tools this year, up 20% from last year.

Leadwell said it has received NT$400 million (US$11.86 million) in orders to be filled in the fourth quarter of this year, which will keep its production lines running through next year's lunar new year holidays. The company estimated it would attain NT$750 million (US$22.25 million) in sales revenues in the third quarter of this year.

"We target to score NT$1.2 billion (US$35.6 million) in sales turnover this year," said Sung Hsien-te, senior export manager of Leadwell. "If we can reach the annual sales goal, we will see the annual production value per worker to reach NT$10 million (US$296,700) this year."

Thanks to the fast growth of mainland China's automobile market, Tong-Tai saw export value of machine tools grow 70% annually in the first three quarters of this year. Because of the recovery of the printing circuit board (PCB) industry, the company boasted it received orders for 30 PCG drilling machines in September alone. The company currently is capable of turning out just 20 PCB drilling machines in full production capacity per month.

With a backlog of orders worth NT$800 million (US$23.6 million), Tong-Tai said it's not hard for the firm to achieve the projected sales goal of NT$2.5 billion (US$73.96 million) this year.

With the substantial growth in exports of machine tools and plastic injection molding machines to mainland China, Victor Taichung estimated its cumulative sales would reach NT$2.7 billion (US$80.1 million) in the first three quarters of this year. With a backlog of orders worth approximately NT$900 million (US$26.7 million), the company said it would challenge NT$3.6 billion (US$106.82 million) in annual sales turnover this year, up 20% from last year's level.

Liu Jen-chieh, a professor of Tunghai University, said the fast-growing automobile and motorcycle industries have brought in strong business opportunities for Taiwan's machine tool manufacturers. Liu estimated every 1% growth in output of automobiles will boost consumption of numerically controlled (NC) machine tools by 0.54%.

Mainland China's consumption of machine tools is expected to grow by 10% from last year, which will help the domestic machine-tool industry to boost sales by 20% from last year's level.

Kent Industrial Co. said it sold RMB85 million (US$10.27 million) worth of grinding machines and machining centers to mainland in the first eight months of this year, up 85% from the same period of last year. The company's major customers come from automobile parts and mold makers.

Expecting a continued growth of mainland's automobile industry, Kent has recently set aside NT$50 million (US$1.48 million) to expand production facility in Hangzhou of Zhejiang Province. In the foreseeable future, the company will invest another NT$100 million (US$2.96 million) to set up a new plant near the old one to focus on the production of pressing machines with an intention to grab the expected massive business opportunities there.