Mon, Apr 16, 2018 - Page 15 News List

FineTek focuses on Indonesian plant

SENSING FUTURE:The New Taipei City-based sensor maker said construction should be finished by the end of Q3, adding a fifth location to its manufacturing facilities

Staff writer

FineTek Co Ltd (桓達) on Friday outlined its plans for a new plant in Indonesia at a Taipei Exchange-organized conference.

The New Taipei City-based company, which makes sensors for automated manufacturing applications, is expected to gain permission from Jakarta for the construction of the US$1.5 million plant this quarter and aims to complete the construction next quarter, FineTek spokesperson Nancy Hsu (許碧雲) said.

If everything goes smoothly, the plant is scheduled to begin mass production at the end of this year or early next year at the latest, Hsu said.

FineTek has operations in New Taipei’s Tucheng District (土城) and Yilan County’s Lize Township (利澤) as well as in Shanghai and Hamburg, Germnay.

It reported consolidated sales of NT$1.06 billion (US$36.18 million) last year, up 22.8 percent from a year earlier, with a record-high net income of NT$195 million, or earnings per share of NT$4.84.

While gross margin fell slightly to 55.7 percent from 57.2 percent in 2016, operating margin grew from 21.7 percent to 22 percent, due to economies of scale and lower operating expense rate.

Automation sensors contributed about 90 percent to FineTek’s total sales last year, followed by 9 percent from electric and pneumatic products and 1 percent from other items, company data showed.

The firm said its products can be used in a number of industries such as the electronic, chemical, oil and gas, machinery, food and beverage, medical and pharmaceutical, shipbuilding and water resource management.

China made up 40 percent of the company’s total sales last year, while Taiwan contributed 20 percent, the US and Europe accounted for 15 percent each, with the remaining 10 percent coming from Southeast Asian nations, it said.

In the first quarter of this year, FineTek’s sales increased 11.61 percent from the same period last year to NT$264.47 million, which the firm attributed to higher sensor shipments to China and the US as well as contribution from Mutec GmbH, a German-based subsidiary.

It said it aims to achieve consecutive growth in quarterly sales this year, expecting revenue to peak in the third or fourth quarter and profitability to be better than last year.

Analysts said shale oil and flow measuring-related products would drive the company’s sales growth this year, as FineTek has tapped into the shale oil sector and also because US President Donald Trump has made shale-oil extraction a major focus of his domestic demand policy.

“Shipments from the shale oil sector grew 120 percent year-on-year to around NT$132 million in 2017 and likely to rise by a further 50 percent year-on-year in 2018, thanks to the expansion of shale-oil extraction,” Yuanta Securities Investment Consulting Co (元大投顧) analyst Calvin Wei (魏建發) said in a note on Thursday.

Wei said shale oil needs level sensors for tank level management during transportation and these level sensors have to meet various requirements to enable wireless transmission, low-power consumption, solar power charging and to operate in environments with high temperatures, high pressure or explosives.

“These requirements have created an entry barrier for suppliers,” he said.

FineTek shares rose 2.39 percent on Friday in trading on the Taipei Exchange. The stock has advanced 13.16 percent this year, compared with the over-the-counter index’s increase of 4.55 percent.

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