Automotive lighting supplier Depo Auto Parts Industrial Co (帝寶工業) said last week its revenue would remain at about NT$1.4 billion (US$46.84 million) this year and next year before its capacity expansion projects are completed in 2016.
The company’s annual capacity in Taiwan would remain at 30 million units of lighting products before the first stage construction project for its new factory in Changhua Costal Industrial Park is completed in the first quarter of 2016 and another manufacturing site in Xinying City (新營), Greater Tainan, becomes operational in 2016, company manager Edward Lu (呂理豐) said at an investors’ conference on Wednesday.
The new factory in Changhua could make 1.8 million high-priced lighting products a year and the new Xinying plant would increase the company’s capacity in Taiwan by about 6 million units a year.
Overall, domestic factories contributed 85 percent of Depo’s revenue of NT$13.66 billion (US$455 million) last year, with most of the products targeted on the automotive after-market in the US and Europe, according to the firm, which shipped 26.5 million car headlights from Taiwan last year.
Despite constraint on capacity from January through last month, Depo still posted a revenue increase of 10.98 percent to NT$8.56 billion, up from NT$7.71 billion a year ago on the back of sales growth in Europe and the US.
The company reported a profit of NT$329.39 million, or NT$1.99 per share in the last quarter, down 4.77 percent from NT$345.9 million, or NT$2.09 per share, posted a year ago and down 23.86 percent from NT$432.63 million, or NT$2.61 per share, recorded in the previous quarter.
Lu said the quarter-on-quarter profit decline was because of foreign-exchange losses last quarter, while the year-on-year decline was due to foreign-exchange losses and disappointing sales results for its Chinese factories.
Three of Depo’s four factories in China, which supply products to the original equipment market in the country, were affected by the lower sales of Chinese automakers this year, Depo said.
The newest factory in Danyang, Jiangsu Province, which targets the local aftersales market, has not reached economies of scale yet and is expected to break even in one or two years, the company said.
Meanwhile, Depo president Hsu Hsu-ming (許敘銘) said the company has set a near-term goal of posting a profit of NT$10 per share and revenue of 10 times its capital of NT$1.66 billion, taking into account depreciation costs for molds for making automotive lighting products.
The target would be translated into a profit of about NT$1.66 billion, which is 23.88 percent higher than the NT$1.34 billion, or NT$8.01 per share, the company registered last year, according to Depo.
“The greatest challenge for companies in our industry is that we have to develop molds for cars around the world, which creates high depreciation costs,” Hsu said.
A mold for one headlight would cost NT$30 million to NT$40 million, while a mold for one fog lamp or small headlight would costs NT$6 million, Hsu said, adding that Depo currently has more than 40,000 products.
The company develops 70 percent of automotive lighting products for 80 million new cars around the world a year on average, according to Depo.
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