Lee Chi Enterprises Co Ltd (利奇機械), which sells bicycle components under the Promax brand, plans to increase capital expenditure this year by 5 to 10 percent to increase its output and meet customers’ demands, a public relations official told the Taipei Times by telephone yesterday.
While the official did not specify an exact figure, the company’s annual financial report showed that it last year spent NT$69.04 million (US$2.22 million) on expanding its manufacturing facilities and buying new equipment, meaning capital expenditure this year would be between NT$72.54 billion and NT$75.94 billion.
“To rapidly respond to customers’ needs, we plan to increase this year’s capital expenditure, as we aim to raise our output by between 5 percent and 10 percent,” said the official, who declined to be named.
The increased output also reflects the company’s forays into the automotive and scooter industries, the official said.
A leading Japanese automobile company earlier this year began sourcing products from Lee Chi, the official said, declining to identify the buyer by name.
Lee Chi has plants in Changhua County and Nantou City, as well as in Kunshan, China.
The company, which started out as a manufacturer of brakes, excels in making aluminum alloys for parts used in bicycles, scooters and automobiles, the official said.
The company has upgraded its production lines and facilities in Changhua’s Shipai Village (石牌) and Nantou City’s Nangang District (南崗), and is evaluating the benefits of opening plants in Indonesia and Vietnam to achieve a more well-rounded supply chain and avoid US tariffs, the official said.
Lee Chi’s products include brakes, levers and handlebars.
The company has also developed power-off brakes for electric bikes, the official said.
“Greater demand for electric bikes is expected to be a generator of growth momentum for us in the second half of this year,” the official said. “However, this benefits transmission parts companies the most, instead of us.”
Lee Chi reported that cumulative revenue climbed 5.8 percent year-on-year to NT$1.24 billion in the first five months of the year due to steady orders, but the official said that the company is still cautious about orders for the remainder of the year.
The company said that it expects the US to remain its largest market this year, contributing 40 percent of total sales, ahead of Europe with 35 percent and Asia with 15 percent.
Lee Chi shares yesterday closed 1.14 percent higher at NT$9.76 in Taipei trading, but they have declined 1.41 percent this year.
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