Big Machine-Tool Makers in Taiwan Poised to Grow Further

Taipei, Feb. 8, 2006 (CENS)--Taiwan' s machine-tool industry suffered a sales slowdown in 2005 because of volatility in foreign exchange and the imposition of macro-economic control policy by mainland China.

With tougher competition plus continued volatility, domestic machine-tool manufacturers will take more cautious attitude toward operations this year. Of them, the large-sized producers are expected to have more development room as they enjoy the advantage of supply chains.

Of the large-sized producers in this line, Awea Mechantronic Co. and Tong-Tai Machine & Tool Co. posted NT$7.2 (US$0.22 at US$1:NT$32) and NT$5.6 (US$0.17) in earnings per share, respectively last year.

Victor Taichung Machinery Works Co. registered NT$4.832 billion (US$151 million) in sales last year, up 10% annually and reaching 97% of its projected goal. The company claimed it received orders of over NT$5 billion (US$156.25 million) last year.

Although Victor Taichung posted a stagnation in Taiwan operations, the firm saw sales grow over 30% for its two plants in Shanghai and Guangzhou of mainland China last year. The company said its Shanghai plant registered NT$800 million (US$25 million) in sales last year, compared to NT$650 million (US$20.31 million) posted in the preceding year. Its Guangzhou plant scored revenues of NT$400 million (US$12.5 million)last year, compared to NT$300 million (US$9.37 million) in the previous year.

Both Awea chairman Edward Yang and Victor Taichung president Bert M.H. Huang believed large-sized makers of machine tools continued to grow while the smaller ones began slowdown, a development that would fuel mergers and acquisitions among makers in the foreseeable future.

Thanks to expansion of production in C-type machining centers and growth of customer base, Awea will enjoy a substantial growth this year. The company said it currently has NT$980 million (US$30.62 million) orders in hand.

Kao Fong Machinery Co. said it registered NT$758 million (US$23.68 million) in sales last year, down 38.62% from the year earlier. But the company has drawn attention from domestic machine-tool industry as automobile-gear manufacturer Hota Industrial Mfg. Co. chairman Shen Kuo-jung has joined in its management to promote cross-industry resource integration.

Tong-Tai noted it would see substantial growth in sales due to booming sales of PCB (printed circuit board) drilling machines. Thanks to the mass production of high-profitable vertical lathes, Falcon Machine Tools Co. would see sales continue to grow this year. With the acquisition of European safety standards, Jenn Feng Group, which focuses on the production of garden tools, will benefit from the business opportunities released from the reconstruction project in light of the Hurricane Katrina.

Despite a slowdown in sales last year, Chin Fong Machine Industrial Co. will complete the construction of its heavy-machinery plant in Taichung Habor area by the end of this year, which will help it raise revenues.

Roundtop Machinery Industries Co. said it has constantly received orders for large-sized double-column machining centers over the past several months, indicating it has made great achievements in exploring emerging marketplaces.