Fri, Jul 01, 2016 - Page 12 News List

Pegatron Corp planning to build more plants in China

By Lauly Li  /  Staff reporter

Pegatron Corp (和碩) plans to build two more plants in China this year, after completing the construction of a plant last year, chief financial officer Charles Lin (林秋炭) said yesterday.

“We plan to begin construction of the new plants before the end of the year and to complete them in the second half of next year,” Lin told the Taipei Times.

Capital expenditure at Pegatron and its subsidiaries would be about US$400 million this year, without taking into account construction costs, the company said.

One of the plants is expected to be more than 16,000 ping (55.136m2) and is to be built at Pegatron’s manufacturing compound in Suzhou, while the other plant is planned for Kunshan.

The firm’s manufacturing units in Suzhou produce a wide range of products, such as games consoles, notebook computers, tablets and set-top boxes, whereas the plant in Kunshan mainly assembles smartphones.

Pegatron expanded its manufacturing plant in Kunshan last year, which is expected to become operational in the second half of this year at the earliest, depending on the company’s arrangements for production utilization later this year.

While the global economy has been unpredictable in the past year, the company is still upbeat about its growth potential over the next few years, Pegatron said.

Since it takes time to build manufacturing plants, Pegatron said it wants to be ready when new business opportunities emerge.

Compared with Pegatron’s aggressive expansion plan in China, the company is more conservative about expanding or entering other overseas markets.

The company has evaluated the feasibility of building manufacturing plants in Vietnam and in the Philippines, but decided not to invest in those nations.

Pegatron is still assessing investment opportunities in India and Indonesia, while its rivals Hon Hai Precision Industry Co (鴻海精密) and Inventec Corp (英業達) have already set up plants in India.

A market analyst, who declined to be named, said that although Pegatron plans to build new manufacturing plants in China, it might not install equipment or operate the plants in the near future due to a sluggish global economy and weak iPhone sales over the past year.

Pegatron might take longer to decide on whether to invest in India for the same reason, the analyst said.

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