Merida Inaugurates Bike Factory in Nantong, China

Merida Industry Co., Ltd., a major bicycle maker in Taiwan, recently inaugurated its fourth plant, in Nantong, Jiangsu Province of China.

Investing US$99.8 million in constructing the factory in the Nantong Economic and Technological Development Area (NETDA), Merida has set a new investment record in company history, with the facility to push  annual capacity to a planned two million units.

Michael Tseng, chairman of Merida, says his company aims to achieve 30% to 50% sales growth in China every year, and targets to become the top brand of multi-speed bicycles in the big market.

Merida's new Nantong factory is expected to first achieve annual shipment goal of some 250,000 units. In 2013, Merida sold about 1.09 million own-brand bicycles in China, aiming to challenge 1.3 million to 1.4 million units this year.

Thanks to smooth sales of higher-end products in China, Merida reported annual earnings per share (EPS) of NT$10.21 (US$0.34) in 2013, the highest in its 42-year history. Thanks to the strong sales in China, Merida's consolidated revenue in Q1, 2014 increased 7.44% to NT$5.67 billion (US$189.03 million).

At the factory inauguration, Tseng said that the Nantong facility is his company's most important investment project in China after the establishment of a factory in Shenzhen, Guangdong Province in 1990, and another in Dezhou, Shandong Province in 2008. The Nantong factory occupies 230 acres with initial annual capacity of about 500,000 units.

Tseng said that there is a well-established bicycle-parts supply chain in Nantong to  directly support Merida to produce middle- to high-end bicycles at the new facility. Half of products made here will be for sale in China, while the rest for exports.

With the new added capacity, Merida's total annual production capacity in Taiwan and China will be raised to some 2.66 million units in 2014. With aggressive development of new distribution channels and retailers in China, Merida in 2014 aims to raise the number of retailers in China from 2,000 to 2,500.