Rechi acquires contract orders from big home-appliance firms

Taipei, Sept. 21, 2004 (CENS)--Rechi Precision Industry Co., Ltd., one of Taiwan's leading manufacturers of air compressors, has recently acquired orders for seven million air compressors from four world-class manufacturers of home appliances for delivery next year.

The four manufacturers that have placed orders with Rechi include Haier Group, TCL Group, and Midea Group of mainland China, and Fedders of the U.S. At present Fedders is the largest supplier of home appliances in the North American marketplace.

If small orders from others are calculated, Rechi has obtained orders for 8.8 million air compressors for shipment next year. With the influx of the big-ticket orders, the company would see next year's combined sales grow by over 30% from this year's anticipated sales of NT$7 billion (US$206.48 million at US$1:NT$33.9).

To meet the influx of orders, Rechi has invested NT$1 billion (US$29.49 million) to set up a new plant in Huizhou of Guangdong Province, mainland China, which will be inaugurated in November this year. The inauguration of the new plant is expected to help the company increase annual output by two million air compressors.

Rechi noted it has acquired orders for 2.5 million air compressors from Midea, two million units from Haier, 1.6 million units from TCL, and 1.7 million units from Fedders. Rechi operates a joint-venture plant in the mainland with TCL. The orders from the above-mentioned four companies account for 90% of Rechi's total orders for shipment next year.

Because of the influx of the huge orders, Rechi called off annual maintenance of its production equipment in August to make a full-scale production.

At present Rechi owns three production bases, two in Taiwan and one in Huizhou. The inauguration of the fourth plant in Huizhou is expected to give the company a shot on the arm. Rechi estimated it would squeeze into the list of the world's top-four manufacturers of air compressors as its annual output would reach over eight million units next year.

Rechi said it scored NT$500 million (US$14.74 million) in combined revenue in August, up 222% from the same month of last year. Cumulative revenue amounted to NT$4.8 billion (US$141.59 million) in the first eight months of this year, up 91% from the corresponding period the year earlier.

Thanks to the outstanding sales performance in the first eight months, Rechi anticipated to see combined sales reach the annual projection of NT$7 billion (US$206.48 million) this year.

The company said it would make all-out efforts to beat Japan's Matsushita Electric, the world's largest manufacturer of air compressors, in annual production capacity in 2006. To that end, the company plans to set up a new production line of air compressors in each of the next three years. In addition, it has resolved to boost production capacity and profitability by vertically integrating the production of upstream products such as cast iron and motors.