Tue, Mar 18, 2014 - Page 13 News List

Auto parts supplier outlines capacity expansion plan

AUTO LIGHTS:Depo Auto Parts has distributed some orders to its local peers to meet demand after a fire damaged its factory in August last year

By Camaron Kao  /  Staff reporter in Greater Taichung

Depo Auto Parts Industrial Co (帝寶工業), which specializes in manufacturing automotive lighting products, plans to spend between NT$3 billion (US$989.6 million) and NT$5 billion this year for capacity expansions in Changhua County and Greater Tainan.

The investment is part of the company’s NT$10 billion investment plan for the next two years, company president Hsu Hsu-ming (許敘銘) said.

Depo will spend the money on a 12-hectare plot in Changhua Coastal Industrial Park, which it purchased from AU Optronics Corp (友達光電), and its factory in Greater Tainan’s Sinying District (新營), Hsu said.

From January through last month, revenue increase of 17.3 percent to NT$2.39 billion from NT$2.04 billion a year ago, according to Depo’s filing with the Taiwan Stock Exchange.

SUBCONTRACTING

Facing limited production capacity, Depo has subcontracted part of its orders to its local peers to meet the demand, he said.

“Continuing storms in the US are expected to increase demand for automotive lighting products in the aftermarket,” Hsu said.

With the help of local peers, the company is now capable of handling 80 to 90 percent of orders it received before a fire damaged its factory in August last year, Hsu said.

As a result, the company forecast revenue this year would rise from NT$13.66 billion last year, he said.

DEPRECIATION COSTS

The company’s depreciation costs will be higher than the NT$1.6 billion to NT$1.7 billion a year ago, while its research and development expenditure will remain at 6 percent of its revenue this year, he added.

Hsu was in prison in the US for 282 days last year because Depo’s US subsidiary, Maxzone Vehicle Lighting Corp, lost an anti-trust case filed by US automotive lighting companies, including Sabry Lee Inc.

The firm booked losses of NT$390.64 million, or NT$2.36 per share, in 2011, after paying NT$2 billion to settle the case.

The company reported earnings per share of NT$5.8 in the first three quarters of last year.

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