Domestic companies profit from war

Two Taiwanese companies with strong business ties to the Middle East are forecasting a surge in sales because of the US-led war in Iraq.

Senao International Co (神腦), one of the nation's top wireless equipment providers, is reporting a surge in orders for its its long-distance wireless phones.

"We are expecting to see a 30-percent jump in sales of long-distance wireless equipment from NT$1 billion last year to this year's NT$1.3 billion," said Kevin Lin (林鴻昌), an executive at Senao.

He called the estimate "conservative," saying sales also soared following the 1991 Gulf War.

The increase will mainly come from Middle East buyers, he said, where demand is strong for phones that can transmit as far as 100km.

The long-distance cordless phones, or private local area mobile (PLAM) phones, are designated to be used in areas with limited access to regular cellphone base stations.

PLAM phones are becoming a popular communication tool in the Middle East since standard cellphones -- with a penetration rate of 3 percent -- are impractical.

"This is a good niche market because of its high-profit margin," Lin said.

Senao's PLAM phones retail for around US$1,000.

Iraq, Afghanistan and Pakistan are Senao's major markets, accounting for 40 percent of its annual PLAM-phone sales.

Senao is expanding its PLAM-phone product line to meet post-war demand, Lin said.

Senao shares jumped 1.4 percent or NT$0.4 to close at NT$28.9 on the TAIEX yesterday.

Another Taiwanese company, oil-seal maker Nak Sealing Technologies Co (茂順密封科技), saw sales rise even before the start of the war.

"As early as January of this year, our office in Iran reported a 10 percent increase in demand over last January," said Chen Jen-an (陳仁安), spokesman for Nak.

Oil seals are sold for use in a variety of vehicles throughout the Middle East.

Nak Shares dropped 1.3 percent or NT$0.6 to close at NT$45.4 on the TAIEX yesterday.

The company is witnessing single-digit sales growth over the same period last year, Chen said.

Meanwhile, the China External Trade Development Council has decided to send a trade delegation to investigate business opportunities in the Middle East.

The mission is expected to visit Turkey, Jordan, Saudi Arabia and the United Arab Emirates within a month of the war winding down, according to Chang Shih-peng (張世朋), a council official.

Delegation participants will include exporters of textiles, machinery, hardware, construction materials, lighting equipment, communications equipment and auto parts, the council said in a statement.