Sumeeko Industries Co Ltd (世德工業), which supplies fasteners for major car makers such as General Motors Co, yesterday said it would spend NT$124 million (US$4.14 million) to acquire a plant in Pingtung County to double its capacity by the end of 2016.
The 3,000 ping (9,915m2) plant is situated on a plot of land 12km from Sumeeko’s existing factory in Greater Kaohsiung, president Alex Chen (陳光裕) said.
Sumeeko’s current production site in Kaohsiung is 1,500 ping, and it also rents a 600 ping site to accommodate demand for its products, Chen said.
The company will first acquire 600 ping of the new site in Pingtung on Oct. 1 and move its facilities on the rented land to the new site, Chen said, adding that the new plant will be transferred to Sumeeko entirely in March next year.
The firm is also mulling an acquisition of a Chinese fastener company near Shanghai, jointly owned by several foreign companies, Chen said.
The acquisition, if it goes ahead, will double the company’s revenue, he said.
Sumeeko currently makes 1,000 tonnes of products a month, while the Chinese company makes 800 tonnes a month, Chen added.
From January through last month, the company posted revenue of NT$841.14 million, up 22.47 percent from the previous year, according to a company filing to the Taiwan Stock Exchange.
Chen said the company’s monthly revenue would rise to NT$120 million next month from NT$111.09 million last month as it received new orders for fasteners from General Motors, its largest client.
Sales to General Motors are about US$4 million a year, and the new orders from the US automobile giant will increase that figure to US$6.5 million a year starting next month, Chen said.
Starting next year, Sumeeko is also likely to start making grounding stud — which is used to remove static electricity buildup in cars — for General Motors, he said.
The company estimated that the order would be between US$2 million and US$8 million a year, but added that the deal is not yet final.
As Tesla Motors Ltd’s sales increase, Sumeeko’s sales to the electric car maker should also rise to more than 10 percent of its revenue next year from 8 percent this year and 5 percent last year, Sumeeko said.
Sumeeko is a tier-one car parts supplier for General Motors and a tier-two supplier for Toyota. Sales to the two companies accounted for 20 percent of its revenue last year, it said.
Sumeeko shares rose 3.5 percent to NT$133 yesterday, outperforming the TAIEX, which was down 0.82 percent.
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