Shihlin Electric & Engineering Corp (士林電機) is to tap into growth in industrial automation, green energy and automotive components, chief operating officer John Hsieh (謝漢章) told an investors’ conference in Taipei yesterday.
The scale of the company‘s industrial automation business has been growing steadily from about NT$2.5 billion (US$81.4 million) at the end of 2013 to NT$4.9 billion at the end of last year, Hsieh said.
The growth was driven by the company’s efforts to transition from an equipment supplier to an industrial automation system integrator, he said.
“Led by a newly formed automation system integration department, we have been seeing an uptick in demand for automation system integration in China, driven by rapid expansion among the nation’s leading display-panel makers,” Hsieh said.
In particular, as many Chinese panelmakers’ expansion efforts are being overseen by Taiwanese executives and industry veterans, they have called upon the reliability of Shihlin’s solutions for their new 10.5-generation plants, he said.
However, the company is aware that the global display-panel industry is facing persistent challenges from cyclical swings and supply glut, and the company has begun to branch out to other markets, Hsieh said.
“We have been diversifying our offerings to attract more recurring orders, such as customized solutions for niche industries,” Hsieh said.
Many of Taiwan’s traditional industries are in need of automation, and Shihlin is developing smart manufacturing and Internet of Things solutions for them, he said.
The company has also secured a place in Taiwan’s drive for offshore wind farms, following its success supplying electrical components for US-based wind projects, he said.
In Taiwan, the company’s role would be limited to supplying electrical components, as it does not have the resources or expertise to be a turnkey services provider, Hsieh said, adding that wind turbines make up the bulk of offshore wind farm development contracts.
The company is in talks with Mitsubishi Heavy Industries Ltd, its longtime partner, to supply Taiwan-manufactured electrical components for wind projects, as servicing and shipping the equipment from Japan would be prohibitive, he said.
As for its automotive business, which contributed 24.9 percent to annual revenue last year, Hsieh said that the company this year began supplying motors and electrical components to electric scooter maker Gogoro Inc (睿能創意), and is also planning to enter the supply chains of BMW AG and Harley-Davidson.
The company reported that net income in the first half of the year rose 2.8 percent annually to NT$739 million, while sales over the period increased 13.48 percent to NT$12.11 billion.
Earnings per share were NT$1.35, it said.
Gross margin in the first six months was 21 percent, up from 20 percent a year earlier, while operating margin inched up from 7 percent to 8 percent over the same period.
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