■ Tire firm ups China investment
Cheng Shin Rubber Industrial Co (正新橡膠工業), Taiwan's leading tire manufacturer, said yesterday it is planning to invest US$120 million in China next year, mainly on production capacity expansion.
Under the investment plan, the company is expected to pour US$40 million to US$50 million in expanding its plant in Xiamen, Fujian Province, next year, a company spokeswoman said.
"We aim to double the Xiamen plant's daily output to 4,000 tires for heavy truck use by the end of next year or in early 2008. The Xiamen plant has become a very important base in China to Cheng Shin Rubber," she said.
Cheng Shin Rubber is one of Taiwan's pioneer investors on the mainland. After having set its foothold in the early 1990s, the company now runs four plants in Tianjin, Shanghai and Xiamen.
The Taiwanese tire maker will also invest US$20 million to US$30 million upgrading a tire testing plant in Kunshan, Jiangsu Province, while spending the remaining amount on production facilities elsewhere, the spokeswoman said.
In the nine months to September, Cheng Shin Rubber posted a NT$1.45 billion (US$44.8 million) net profit, up 60.4 percent from a year earlier.
■ Bad debt could top NT$40bn
Chinatrust Financial Holding Co (中信金控), the nation's largest credit card issuer, expected its annual provisioning cost covering potential bad debt to exceed NT$40 billion this year amid the mounting defaulted consumer loans storm, the company said yesterday.
For the first 11 months of the year, Chinatrust Financial has booked a massive reserve cost of NT$37.62 billion, which led to a cumulative net loss of NT$1.3 billion, or NT$0.33 per share.
For prudence's sake it was possible to make extra reserves to cover 40 percent of the overdue loans under the debt negotiation scheme, the company said.
This may mean extra reserve of NT$14 billion, given company's NT$34.66 of defaulted loans under debt negotiation program as of the end of September.
Profitability is expected to rebound with return on assets rising back to 100 base points, the company said.
Net profits may be equivalent to NT$16.2 billion next year, considering the company's assets of NT$1.62 trillion.
Meanwhile, company spokesman Jason Wang (王正新) said he had no knowledge of the reported cooperation with Goldman Sachs to introduce foreign investors.
He declined to comment if the company is inviting Sung Hsueh-jen (宋學仁), vice chairman of Goldman Sachs Asia, to be the firm's external board director.
■ New VP for Taiwan Ratings
Standard & Poor's Ratings Services (S&P) yesterday announced the appointment of Daisuke Fukutomi as vice president and chief ratings officer of Taiwan Ratings Corp, the company's ratings joint venture in Taiwan.
Fukutomi will oversee the Corporate & Government Services and Structured Finance ratings groups at Taiwan Ratings, as well as ensuring the quality and integrity of ratings and ratings process, S&P said in a statement released yesterday.
Fukutomi, who will report to Eddy Yang (楊鎮龍), president of Taiwan Ratings, is expected to work to enhance Taiwan Ratings' analytics, develop new ratings products and promote further integration between Taiwan Ratings and S&P, the statement read.
■ NT dollar down on greenback
The New Taiwan dollar weakened against the US dollar on the Taipei Foreign Exchange yesterday, losing NT$0.1 to close at NT$32.490.
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