Kao Fong moves into automotive parts processing

Taipei, July 2, 2003 (CENS)--Kao Fong Machinery Co., Ltd., one of Taiwan's largest machine-tool manufacturers, will begin processing automobile and motorcycle parts this year using its high-precision fixed-axis machining centers.

Kao Fong will begin production at its Kunshan plant in Jiangsu province, mainland China sometime in July. The company has anticipated that the new plant will help it push revenue to NT$1.34 billion (US$38.78 million at US$1:NT$34.6) this year, up 52% from 2002.

The company said it has completed an after-sale service center in its Kunshan production facility to cope with the pilot production of the plant.

Kao Fong will soon apply for permission to build a production facility at the Taichung Science-based Industrial Park. It will also cooperate with Chiayi County's National Chung Cheng University to set up a research and development center at the industrial park.

Chuang Kuo-hui, chairman of Kao Fong, said his company will set aside NT$1 billion (US$28.9 million) to establish the proposed R&D center with an aim to develop nanotechnology equipment and produce vacuum pumps, linear-motor machine tools, wafer cleansers, and advanced nano-class machine tools.

At a recent shareholder meeting, Kao Fong decided to distribute a dividend of NT$0.5 (US$0.01) per share for 2002. During the meeting, Chiu Tai-shan, a former legislator, was chosen as an independent board director, and Chuang Wu-hsiung, branch manager of Bank of Taiwan, was chosen as an independent supervisor.

Shareholders also passed a resolution to allow the company to increase its paid-in capital to NT1.2 billion (US$34.68 million) from NT$800 million (US$23.12 million) at present. The company will set aside the new capital for the issuance of convertible corporate bonds in the near future.

Chuang said his company has seen influx of domestic and overseas orders since the beginning of this year. The company posted NT$667 million (US$19.27 million) in sales revenues in the first half of this year, up 62% from the same period of last year. The company's pre-tax earning amounted to NT$63.36 million (US$1.83 million), or NT$0.9 (US$0.02) per share, in the first six months of this year.

Chuang said that the Taiwan's machinery manufacturers are well poised to win big-ticket orders from mainland China this year as many emerging manufacturers there are gradually switching from European machines to cheaper Taiwan-made models.