Machine tool manufacturer Quaser Machine Tools Inc (百德機械) has tightened its sales growth outlook this year, citing unfavorable foreign exchange rates.
The Taichung-based company now expects sales to be flat from last year’s NT$1.9 billion (US$61.1 million), Quaser president Rock Liao (廖子恩) said on Tuesday.
The company had previously forecast a 5 percent annual growth in sales to NT$2 billion this year.
Market researcher Industrial Economics and Knowledge Center (IEK) predicted that Taiwan’s machine tool industry would increase production value by 1.3 percent annually to NT$152.9 billion this year on the back of rising demand for aerospace, transportation, intelligent manufacturing and automation systems.
“We are seeing good order visibility to August, which will help grow our unit shipments. However, a weak euro is likely to wipe out growth,” Liao said.
RISING TREND
Demand is rising because of improving economic conditions in Europe and more firms moving production back to the US, he said.
Quaser, which has NT$352.5 million in capital and operates a factory in central Taiwan, plans to build a new plant in Taichung. The company has offices in China’s Kunsan and in Switzerland, Liao said.
Most of Quaser’s products are exported to Europe, making the region the biggest source of revenue, accounting for 60 percent, Liao said.
The US and China come next, with 12 percent and 11 percent revenue contribution respectively, he added.
Liao said depreciation in the euro and yen are eroding Quaser’s revenue, as unfavorable foreign exchange rates are hurting Taiwanese companies’ competitiveness in the global market.
Taiwan is the world’s No. 4 machine tool exporter, after South Korea, Japan and Europe, according to market observers.
Liao said that if the New Taiwan dollar were to drop to NT$33 versus the US currency, local machine tool manufacturers would be better able to compete with foreign rivals. That would mean a 5.72 percent depreciation from NT$31.113 against the greenback yesterday.
IPO
Separately, Quaser plans to apply for an initial public offering (IPO) in Taiwan and will use the IPO proceeds for capacity expansion and research and development, Liao said.
He said the company is set to go public in September and list its shares domestically by the end of next year.
Local rival Fair Friend Group (友嘉集團) also plans to launch an IPO next year. Fair Friend operates 42 factories around the world.
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