To find out if a company is truly living up to its corporate slogan, sometimes one just has to sneak into its staff cafeteria.
For more than one year, Delta Electronics Inc’s (台達電) cafeteria, which is located on the third floor of the company’s Taipei headquarters, has stopped serving beef.
Employees can have breakfast and lunch at the cafeteria on work days for only NT$200 (US$6.75) per month, and they are treated to a wide variety of food — except for beef.
Photo: Bloomberg
“To raise 1kg of beef, at least 1,000 liters of water has to be used to maintain the pasture,” Delta vice chairman and CEO Yancey Hai (海英俊) said on March 10.
Hai said methane from cows’ and the farming industry contribute to the deterioration of the environment and are accelerating global warming. Therefore, Delta chairman Bruce Cheng (鄭崇華) ordered the firm’s cafeteria to stop serving beef.
Cheng, whose second title on his business card is chief environmental officer, has even stopped using cows’ milk, opting instead for alternatives such as sheep’s milk.
For a company that claims to be doing “green business,” Delta — the world’s top manufacterer of switching power supplies — indeed lives up to its corporate mission of “providing innovative, clean and efficient energy solutions for a better tomorrow.”
Power supplies — its core IT business — contributed to 52 percent of the company’s total revenues of NT$171.3 billion last year, down from 60 percent in 2009, when it posted revenues of NT$124.1 billion.
The company’s power supplies power Hewlett-Packard Co’s notebooks and Apple Inc’s tablets, among others.
Delta’s non-IT, or green business, includes industrial automation, LEDs, solar power, electronic paper and electric vehicles.
“Our focus is to switch to non-IT businesses in the future. It is not an easy task to steer the vessel [away from IT business and] toward a new direction, but we are on the right track now,” Hai said.
Emerging markets and rising companies are searching for automated solutions for their factories to quicken and standardize the production of goods, such as food and packaging, and this is where Delta fits in.
AUTOMATION
The company is selling components and modules used for industrial automation, such as inverters, converters, drivers and motors, and it aims in the future to become a one-stop provider, offering complete automation solutions to help clients program and manage the entire operation.
The firm is automating its own factories, as well. The move will allow it to reduce its number of factory workers by 10 percent this year, enabling it to save over the long run — a benefit touted by industrial automation solution providers.
The industrial automation sector is especially promising in China as the nation prepares to launch its 12th five-year economic development plan later this year, which will steer the country toward reducing carbon emissions, conserving energy and automating factories, Hai said.
Delta is aggressively expanding its industrial automation sales channels in China, which accounts for 50 percent of its industrial -automation business.
The company announced earlier this month that it is spending US$161.8 million to boost its stake in Chinese partner Delta GreenTech (China) Co (中達電通) to 48.5 percent from 10 percent. The move will allow Delta to obtain access to more than 400 existing Delta GreenTech sales channels, and the number will expand to more than 500 by year’s end, Hai said.
LED LIGHTING
Delta is also chasing the LED business by producing light bulbs and projectors for street lamps, and the firm has its sights set on the booming market across the Taiwan Strait. The company, which has production facilities in Dongguan, China, has pilot projects running with the local municipal government.
Hai said the adoption of street lamps in China — despite the massive volume — is still at the wait-and-see stage because the outdoor LED lamps have to withstand use under extreme conditions, such as a sudden rise or drop in temperature or a sudden weather change that results in a sandstorm.
Last month, Delta announced that it would team up with Epistar Corp (晶電), Taiwan’s leading LED chipmaker, to establish an LED wafer and chip plant in Guangzhou, China.
Costing NT$3.63 billion upfront with production scheduled to commence next year, Delta owns 30 percent of the venture, while Epistar controls the remaining 70 percent.
“Despite its small contribution currently, LED lighting is one of the areas with huge growth potential for Delta,” CLSA Ltd said in a research note last month. “The joint venture is positive for Delta since it can leverage Epistar’s know-how, low-cost manufacturing and -exposure to Chinese customers.”
The Hong Kong-based brokerage said that Delta’s strategy is to take strategic stakes in chipmakers and packagers, which allows it to focus on design and manufacturing of LED light bulbs.
CLSA projected that global demand for LED lighting would expand 168 percent to 141 billion units next year. Delta introduced LED lights in Taiwan that carry its own “Delta” brand name in the second half of last year, testing the market by gauging consumer responses to its brand.
“We are testing the sweet spot [of the LED lighting’s price tags,] to see how we could market our brand of lights in China or other markets in the future,” Hai said.
SOLAR POWER
Delta also sees potential in solar energy — an industry that jumped into the spotlight after Japan was hit by a magnitude 9.0 earthquake on March 11 that caused its Fukushima Dai-ichi nuclear power plant to leak radiation.
The incident has raised public concern about the safety of nuclear power plants and revived discussion on the use of solar energy as a safer means to generate power.
DelSolar Co (旺能光電), a solar subsidiary 60 percent owned by Delta, plans to spend NT$7 billion this year to boost its annual solar cell manufacturing capacity to 800 megawatts from the current 400 megawatts.
Delta is also on the lookout for mergers and acquisitions.
“We are looking for larger acquisitions of at least US$100 million in value,” Hai said.
However, any target firms must be complementary to Delta’s principals of green business, offer technology that Delta lacks or have the potential to instantly bring in new clientele, he said.
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