Wed, Jul 24, 2013 - Page 14 News List

Airtac looking to Tainan plant to boost global sales

By Camaron Kao  /  Staff reporter

Airtac International Group (亞德客), a China-based maker of pneumatic products, plans to move into production of electric tools and invest NT$3 billion (US$100.4 million) in a new plant in Greater Tainan.

Construction of the plant is set to begin in the fourth quarter and finish by 2015, chief financial officer Ivan Tsao (曹永祥) said yesterday.

“Sales will grow faster by investing in a new line of business rather than investing in pneumatic products,” Tsao told an investors’ conference in Taipei.

Construction of the plant would lift Airtac’s capital expenditure for this year by NT$1 billion, on top of the 260 million yuan (US$42.36 million) it had originally earmarked, Tsao said.

Last year, the firm’s total capital expenditure stood at 390 million yuan, Tsao said.

The plant will make advanced pneumatic products and electric tools, he said, adding that it is expected to generate revenue of NT$1 billion and break even in 2015 and to double the revenue to NT$2 billion in 2016.

To finance the plan, Airtac is to issue 10 million common shares in the fourth quarter, Tsao said.

The company has not finalized a price for the new shares, which could result in a 6.25 percent stock dilution, as the company has about 150 million shares outstanding now.

Based on yesterday’s closing share price of NT$166.5, the company is likely to raise as much as NT$1.67 billion via the issue.

Airtac last quarter reported a record profit of NT$541 million, or earnings per share of NT$3.37, an increase of 106.5 percent from NT$262.49 million a quarter earlier and up 62.41 percent from NT$333.1 million the previous year.

From January through last month, the company turned a record profit of NT$804 million, or NT$5.01 per share, up 41.5 percent from the previous year, with revenue rising 24 percent to NT$3.5 billion.

Tsao said the company would likely see revenue fall this quarter during the traditionally slow season, but expects the decline to be lower than the 5 to 10 percent decline seen in previous years.

Airtac is the world’s seventh-largest maker of pneumatic products with a market share of less than 2 percent, and aims to become the third-largest with a 10 percent market share by 2020, Tsao said.

To achieve this, the firm will seek to boost sales outside China Tsao said, adding that China accounts for just 15 percent of the global machine-tool market.

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