TSE-listed bicycle parts makers expect smooth businesses this year

Taipei, Feb. 25, 2004 (CENS)--Three leading makers of bicycle parts listed on the Taiwan Stock Exchange (TSE), with division-of-labor production schemes across the Taiwan Strait, are expecting smooth business operations this year.

The three companies are Lee Chi Enterprise Co., Ltd., Falcon Cycle-parts Co., Ltd., and Sunrace Roots Enterprise Co., Ltd.

Lee Chi spokesman Chang Jiah-hsien said that his company would concentrate on expanding the capacity for its disc brake assembly products this year. Currently, Lee Chi's monthly capacity of such products has grown to 60,000 sets from 30,000 sets in 2002, but the monthly order volume has exceeded 100,000 sets.

According to Chang, his company has been receiving increasing orders from European customers for disc brake systems used on high-level bicycle models. He said the products made by Lee Chi's Taiwan disc brake plant are supplied mainly to the European market; while those made by its subsidiary, the Ever Glory Machinery (Kunshan) Co., Ltd. In Jiangsu Province, mainland China, are exported mainly to the U.S. market. Ever Glory currently produces bike disc brakes by assembling parts and components shipped from Taiwan.

Lee Chi has another subsidiary, the Long Da Machinary (ShenZhen) Co. Ltd. In Shenzhen, Guangdong Province, mainland China, which was established in early 2003 and currently assembles products with parts and materials supplied by Lee Chi's Taiwan plant and Ever Glory. Chang said that the new mainland subsidiary is just at its initial operation stage and expects to break even this year after completing installation of production lines.

Falcon said its revenue declined a little in January due to the long Chinese New Year holidays, but has rebounded to a normal level this month. Falcon currently runs three subsidiaries in mainland China, including Falcon Cycle-parts (Shenzhen) Co., Ltd., Suzhou Falcon Cycle-parts Co., Ltd. And another new plant

Sunrace, a major maker of derailleurs, said that it is closely observing the market changes, especially that Shimano, the world's No. 1 bicycle parts maker, is in a litigation against a leading U.S. bike parts brand on patent infringement. If the patent-infringement case is sustained, Falcon said, the global bicycle parts market is expected to reshuffle and create new chances for the firm to gain more share.

A senior Sunrace official is very optimistic about his company's sales this year as a new derailleur model jointly developed by the firm and the Mechanical Industry Research Laboratories of domestic Industrial Technology Research Institute has won patents in many industrially advanced nations. In addition, he added, Falcon is in intensive talks with several big European customers over the company's new inter-eight-speed derailleur hub model to finalize order-placing details. He said that relevant decisions are expected to be publicized at the coming Taipei Cycle Show next month.

Sunrace currently runs a subsidiary in Wuxi, Jiangsu Province, mainland China. The mainland subsidiary recently received big-ticket orders from a major American customer.

Sunrace said that its mainland plant adopts self-produced freewheel parts and farm out the assembly job to upgrade cost competitiveness.