Mon, Feb 23, 2004 - Page 10 News List

Teco plans NT$10bn in investments

BIG SPENDING The No. 2 home-appliance maker in Taiwan wants to construct new factories in Europe and China to capitalize on and increase in demand


Teco Electric and Machinery Co (東元電機), the nation's second-largest home-appliance maker, plans to spend about NT$10 billion on expanding its consumer electronics business during the next three years, a top official said on Saturday.

The investment will include two new plants in Europe and southeast Asia, two factories in China and eight research and development centers in Taiwan and overseas, Teco chairman Theodore Huang (黃茂雄) told a local Chinese-language newspaper.

"Betting on booming demand for consumer electronics amid the improving global economy this year, Teco will focus its investment on expanding its home appliance business into the world," Huang said.

One of those home appliances is flat-screen liquid-crystal-display (LCD) televisions, shipments of which will surge to around 10 million sets this year, according to a forecast from the Topology Research Institute (拓墣產業研究所).

Taiwanese companies will be able to capture 23.5 percent of the market, or 2.4 million units, the researcher said.

In the first year of the three-year investment plan, Teco plans to spend NT$3 billion to US$4 billion on building eight R&D centers and completing three factories in Europe, China and southeast Asia, Huang said.

Huang said he expected Teco to report NT$30 billion in sales this year, up from NT$22.8 billion in 2002, with half the revenue coming from its home appliances division. Much of the increase would come through sales of LCD televisions, he said.

Teco's two Chinese plants are under construction and are scheduled to start operation in the first half of this year.

One is a television plant in the town of Wuxi, about an hour's drive west of Shanghai, and the other, in Nanjing, will produce refrigerators or air conditioners.

Frank Wu (吳宏庭), executive of the group's consumer appliance and service sector, said his division will ship about 600,000 LCD televisions this year, nearly double last year's figure, thanks to the new factories.

Teco hopes to repeat its success in selling its brand-name LCD TVs to Japan by targeting Europe and Australia, Wu said.

Teco, which produces LCD TVs for US retailers, does not plan to sell its brand-name products to the US but will be satisfied with the role of a contract manufacturer, or original equipment manufacturing (OEM) service provider, Wu said.

To gain better access to European markets, Teco is likely to locate its European assembling factory in eastern Europe in a bid to avoid paying 14 percent import tariffs, Wu said.

Teco will soon choose the location of a new home-appliances plant in either Malaysia or Vietnam, the company said.

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