Patec Precision Industry Co Ltd (百達), which makes automobile and motorcycle components, yesterday gave an optimistic outlook for the company’s business next year, as it is due to benefit from continued expansion in China by its major client Volkswagen Group.
Volkswagen — which sells its cars in China through joint ventures such as FAW-Volkswagen Automotive Co Ltd (一汽大眾) — contributes nearly 50 percent of Patec’s total sales, company data showed.
Volkswagen is expected to launch 10 new sports utility vehicles in China over the next three years, Patec chief financial officer Sean Hsu (許書祥) told an investors’ conference in Taipei.
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Patec, which is headquartered in Singapore, plans to deepen its collaboration with Volkswagen and secure more orders from the German automaker as the firm has joined its MQB modular platform, he said.
Through the MQB platform, Volkswagen aims to decrease production costs and to ensure the quality of standardized components made by its global suppliers, he added.
Next year, FAW-Volkswagen and Shanghai Volkswagen are to introduce about 20 new models for Chinese customers and those cars would be supported by the MQB platform, Patec said in a statement.
Nearly 80 percent of Volkswagen’s new models would be produced using the MQB platform, up from this year’s 40 percent, the statement said.
“Patec should benefit from the MQB platform. Besides, we only have a few competitors [in Volkswagen’s global supply chain],” Hsu said.
To meet rising demand, Patec is allocating a budget of approximately NT$100 million (US$3.33 million) for research and development.
The company is planning to launch one-way pulleys in cars featuring cold forging technology to help save processing costs, it said, but did not give a timetable.
Meanwhile, the company also plans to tap the medical equipment market to diversify its product portfolio and to enhance its margin.
To differentiate itself from its competitors, Patec said it is to make medical equipment using cold forming solutions instead of outdated hot forging technologies, which reduces the waste generated during the acid pickling process.
Asked about its key products, the company expects sterilization containers equipped with unique device identifiers to start making a contribution to its revenue next year, it said, without elaborating.
The firm posted aggregate net income of NT$96.31 million in the first three quarters of the year, a 23.16 percent increase from NT$78.20 million the previous year, mainly due to stable growth in its core businesses.
Sales in the first nine months of this year were NT$1.53 billion, up 7.75 percent year-on-year from NT$1.42 billion the previous year, with gross margin rising to 29.43 percent from 28.61 percent, Patec’s data showed.
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