Kao Fong Invests in World Known to Tap China Machine-tool Market

Taipei, July 10, 2008 (CENS)--Kao Fong Machinery Co., a major Taiwan-based manufacturer of precision machine tools, recently proposed to invest in World Known Mfg. Co., a specialized maker of automotive parts.

Kao Fong, mainly producing machining centers, said it would sell machinery worth NT$30 million (US$990,100 at US$1:NT$30.3) to World Known to buy a stake in the latter. Kao Fong president K.J. Shen said the investment would help his company tap the mainland China's machine-tool market.

Capitalized at US$240 million, World Known scored NT$7 million (US$231,020) in earnings on sales of NT$600 million (US$19.8 million) last year.

Over the past several years, World Known has seen substantial growth in sales. Headquartered in Taiwan, the company has set up production in Fuzhou of Fujian province, mainland China. Specializing in producing braking system parts, engine transmission system parts and a variety of valves, the company's major clients include Siemens and Comius.

To facilitate its expansion in production, over the past two years World Known has actively procured production equipment as machining centers, with such high demand prompting Kao Fong to invest in the automotive parts manufacturer.

Kao Fong scored NT$40.55 million (US$1.33 million) in pretax earnings on sales of NT$751 million (US$24.78 million) last year. Shen estimated his company would see sales volume of machine tools exceed 360 units this year, up 10% year-on-year. The company's general stockholders meeting recently resolved to distribute NT$0.3 (US$0.009) cash dividend this year.