Chairman Jimmy Chu of the Fair Friend Ent. Group (FFG) announced that his company will enter into alliance with Aerospace Industrial Development Corp. (AIDC) to develop and manufacture composite materials for aircrafts.
FFG, Taiwan's biggest machine-tool maker, will provide equipment to the material suppliers of the state-run AIDC, including high-performance five-axis machining centers from its German and Italian subsidiaries.
The group will also open a new factory at cost of NT$800 million (US$25 million at US$1:NT$32) in Taichung to produce components for the high-end machining centers. Construction will begin sometime in the first quarter of 2015 and be completed at year end.
Chu said FFG's German and Italian subsidiaries supply equipment to aircraft builders worldwide.
FFG plans to add an aircraft business group to its current four business groups (machine tools, printed circuit board equipment, industrial equipment and components, and green-energy equipment) to tap the lucrative market, valued at tens of billions of NT-dollars a year.
Helped by a recovery in the global aircraft market, AIDC is estimated to have earned consolidated revenue of over NT$24 billion (US$750 million) in 2014 and still have approximately NT$100 billion (US$3.12 billion) of undelivered orders. The order backlog is projected to keep the company working at full capacity for at least the next five years.
The aircraft builder will spend around NT$2.4 billion (US$75 million) to boost production capacity at its manufacturing sites in Taichung and Kaohsiung.
FFG had consolidated revenue of NT$72 billion (US$2.25 billion) in 2013, with the machine-tool business accounting for NT$41 billion (US$1.28 billion). The group's machine-tool business revenue is projected to rise to NT$50 billion (US$1.56 billion) in 2015 after climbing to NT$45 billion (US$1.40 billion) in 2014.
The group recently acquired an 80% stake in South Korean machine tool maker DMC for US$20 million, as well as a stake in a century-old German machine-tool maker. Both deals are expected to be approved by the South Korean government and European Union.
Chu said his group plans to acquire two multi-billion renminbi machine-tool makers in mainland China by the end of 2015.
