Zeng Hsing Industrial Co (伸興), the world’s largest original design manufacturer (ODM) of household sewing machines, yesterday said shipments to Europe this year are weaker than last year due to a drop in demand, and the company is looking at China and other Asian markets for future growth drivers.
Shipments to Europe, a major export market accounting for nearly 45 percent of the firm’s total sales, are estimated to drop to 3.06 million units from last year’s 3.12 million units, the Taichung-based company said at an investors’ conference in Taipei.
Sales in Russia and Eastern Europe might not return to 2014 levels in the short term, Zeng Hsing chairman Lin Chih-cheng (林志誠) said.
“We think there is still much growth potential in the Chinese market, [compared with developed countries],” Lin said, adding that the demand for sewing machines in that market is roughly 400,000 units per year.
However, in the next five years China’s demand for the product is forecast to surpass the US market, which consumes 2.1 million units per year, he said.
North America and Asia make up 24 percent and 15 percent of the company’s sales respectively, company data showed.
To improve relations with Chinese customers, Zeng Hsing plans to convert some of its plants in China into after-sales service offices and logistic centers, while increasing production at its Vietnamese plants from 79 percent this year to 85 percent of its total production volume next year.
The company has not disclosed its capital budget for next year, but said it plans to spend nearly NT$700 million (US$23.33 million) building new headquarters in Taiwan, construction of which is scheduled to be completed by the end of 2019.
Its revenue last month jumped 21.8 percent year-on-year to NT$551.12 million from NT$452.5 million, while cumulative revenue for the first 11 months totaled NT$5.46 billion, down 1.98 percent on an annual basis from NT$5.57 billion, company data showed.
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