Tue, Aug 02, 2016 - Page 12 News List

Swancor first-half profit plunged on competition

By Kuo Chia-erh  /  Staff reporter

Swancor Industry Co Ltd (上緯), which manufactures rotor resins for wind turbines and corrosion-resistant materials, yesterday said that annual net profit plunged 85.03 percent in the first half due to increased competition in the Chinese market and falling material prices.

Net income slid to NT$65 million (US$2.05 million), or NT$0.74 per share, on revenue of NT$2.81 billion, down 41.09 percent from a year earlier, company executives told an investors’ conference.

China accounts for more than 80 percent of the revenue of the Nantou-based company, which also has plants in Shanghai, Tianjin and Jiangsu Province.

The Chinese government’s measures to reduce an oversupply of wind turbines affected Swancor’s sales of related products, the executives said.

However, Swancor expects sales to pick up in the second half.

“Demand for corrosion-resistant materials in China is still rising, and we may adjust product prices in line with fluctuations in [raw] material prices,” Swancor chairman Robert Tsai (蔡朝陽) said.

Swancor’s expansion in Jiangsu is to commence operations in the second half of next year, manufacturing more corrosion-resistant materials, Tsai said.

The company also sees growth for its wind-turbine resin business.

“The performance [in the second half] will be better than in the first half. The profit margin will also not be lower than last year’s,” Tsai added.

As part of its diversification strategy, the company plans to expand its focus on the Southeast Asian and Indian markets, as well as introduce its products to new markets, such as Mexico and Turkey, the company said.

Swancor has also ventured into the wind turbine business. It inked in May a NT$2.5 billion syndicated loan led by Cathay Financial Holding Co (國泰金控) to construct two wind turbines off Taiwan’s coast.

Swancor’s subsidiary, Formosa I Wind Power Co Ltd (海洋風力發電), is constructing two offshore wind turbines in the first phase and plans to install 30 more turbines in the long term.

“The two offshore wind turbines are scheduled to start operations in the second half of this year, and the next 30 turbines are expected to begin operating in 2019. We are still seeking interested investors,” Tsai said.

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