Sun, May 13, 2018 - Page 1 News List

Ta Chen plans to invest US$1bn in US

LOCALLY MADE:Ta Chan and its affiliate Brighton-Best International are considering options to set up their own factory or buying a US production site for the investment

Staff writer, with CNA

Ta Chen Stainless Pipe Co (大成不鏽鋼), the largest stainless steel distributor in the US, is to join forces with an affiliate to invest US$1 billion in the US, eyeing rising demand for aluminum products there.

Ta Chen said it would work with Brighton-Best International (Taiwan) Inc (大成國際鋼鐵) to produce aluminum coils and plates in the US in response to US President Donald Trump’s “America first” policy, which includes attracting investments to and creating jobs in the US.

The plan came after Ta Chen last year acquired an aluminum company in the US to produce aluminum products and import products into the US.

Aluminum coil and plate supplies in the US market are tight after Washington limited Chinese imports late last year, accusing Chinese firms of selling their products at unfairly low prices, Ta Chen said.

However, demand in the US remains solid, so aluminum coil and plate prices have been rising, which prompted Ta Chen and Brighton-Best to study the possibility of producing the products there, it said.

Ta Chen is to invest US$510 million and Brighton-Best is to invest the remaining US$490 million.

The plan is subject to a review by the Investment Commission.

Ta Chen said the companies are considering options to set up their own aluminum plant or acquire a US production site for the investment.

Trump on March 8 signed an order under Section 232 of the US’ Trade Expansion Act of 1962 to impose additional tariffs on imported steel and aluminum by 25 percent and 10 percent respectively.

Ta Chen is one of the Taiwanese companies that could be negatively affected by the tariffs.

While Taiwan is seeking an exemption from the tariffs, Ta Chen’s move could reduce their negative effects on the company, as products made in the US are not subject to tariffs, market analysts have said.

Ta Chen said the company has to have its operations registered in the US to have a chance of becoming profitable there.

Ta Chen posted NT$1.33 billion (US$44.67 million) in net profit for the first quarter of this year, up 475.35 percent from a year earlier, with earnings per share of NT$1.38, compared with NT$0.27 for the same period last year, a company filing with the Taiwan Stock Exchange showed.

Brighton-Best’s net profit stood at NT$260 million in the January-to-March period, up 95.23 percent from a year earlier, while earnings per share rose to NT$0.43 from NT$0.23 during the period.

Ta Chen shares on Friday closed up 2.05 percent at NT$34.8 in Taipei trading, while Brighton-Best moved 0.8 percent higher to NT$25.1.

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