Taiwan Sakura Corp (台灣櫻花) expects annual revenue to grow 5 to 8 percent year-on-year on the back of steady growth in kitchen appliance sales and has spent NT$418 million (US$13.22 million) on land in Taichung’s Wufeng District (霧峰) for a new manufacturing facility.
Investing up to NT$500 million in a new facility should resolve insufficient manufacturing space at its other Taichung plants, while increasing output to meet rising demand, the company said.
Taiwan Sakura operates three plants in the city’s Wufeng, Shengang (神岡) and Daya (大雅) districts. The Wufeng plant makes kitchen products, while the Shengang plant produces range hoods and the Daya plant manufactures water heaters and gas stoves.
The new Wufeng plant should be operational in two to three years, Taiwan Sakura spokesman Li Hui-hsun (李惠恂) told the Taipei Times on Thursday.
The company expects sales of digital water heaters to increase to 60 percent of total water heater sales in two years, compared with 50 percent last year, Li said, adding that this would boost this year’s revenue.
Sales of kitchen products should increase this year, as they showed a compound annual growth rate of 49 percent from 2013 to last year, he said.
“We expect annual sales of our water heaters, gas stoves, range hoods and kitchen products to grow following promotional activities in the second half of the year,” Li said.
Despite the effects of US-China trade tensions, the company’s cumulative revenue in the first four months of this year increased 0.75 percent year-on-year to NT$1.83 billion.
Gas water heaters have seen steady sales so far this year and could remain a major item for the company, Li said.
Taiwan Sakura is considering entering the home decoration segment, as no brand dominates the market and customers are unsatisfied with existing products, Li said.
“We are known for our kitchen products and after-sales service, and we have a broad customer base and an extensive network of brand stores, giving us an advantage in entering the market,” he said.
A booming market in Vietnam is expected to add further sales momentum to Taiwan Sakura, the company said.
Taiwan Sakura is evaluating whether to expand in Vietnam, where the rising population promises a growing kitchenware market.
The company over the past 15 years has collaborated with local agents to market its products in Vietnam and established an office there in November last year.
The company reported that first-quarter net income increased 1.89 percent to a record NT$198.11 million, from NT$194.43 million in the same period last year. Earnings per share improved slightly from NT$0.89 to a record NT$0.91, while gross margin rose 0.84 percentage points to 36.02 percent.
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