Kao Fong Machinery Co., Ltd., a subsidiary of Hota Industrial Mfg. Co., Ltd., has signed a syndicated loan of NT$1.1 billion (US$36.6 million) with eight Taiwan-based banks to finance its expansion?amid promising market outlook.
The company projects its revenue for this year to rise 23% year on year, to NT$2.3 billion (US$76.6 million), and after-tax net income for the same year to hit an all-time high of NT$1.8 per share. The estimates are based on recovering business cycle and the company's success building?distribution networks in Europe and the Americas.
Last year, the company made NT$1.5 per share?on revenue of NT$2 billion (US$67.3 million), both?new highs.
Industry executives estimate Kao Fong and Hota to generate combined revenue of NT$6.8 billion (US$226 million) this year, surging around 18% from last year's.
Kao Fong is constructing an NT$600 million (US$20 million) factory at the Central Taiwan Science Park to build?high value added heavy-duty double-column machining centers, five-face machining centers and five-axis machining centers, to begin?production?in?February 2015.
The company will budget?NT$350-400 million (US$11.6-13.3 million) of the?loan to build the?factory?this year. It has spent around NT$90 million (US$3 million) to buy Japan-made 10-meter-column five-face machining centers and horizontal boring machines to enhance?processing precision of?back-end production.
Part of the latest loan will go to?paying down a previous loan this year. Previously the company signed a five-year, NT$800 million (US$26.6 million) loan with the same?eight banks, including Land Bank of Taiwan, First Bank, E. Sun Bank, Chang Hwa Commercial Bank, Hua Nan Bank, Industrial Bank of Taiwan, and EnTie Bank. Kao Fong has spent NT$500 million (US$16.6 million) of it.
According to company executives, Kao Fong still has around NT$500 million (US$16.6 million) of unfilled orders?as a result of rising sales, judging from?recovering?car-making industry in Europe, the United States, and? China?as well as?brightening outlook of the 3C (consumer electronics, communications, and computer) and information-technology industries, all of which?drive demand for machine tools.
They feel that over the next three years the global car-making industry will see considerable growth after years of tepid demand since the 2008 financial crisis and the 2010 oil crisis, and that?a new round of car replacement purchases?is taking place worldwide with renewed optimism in the aftermath of those disasters. (KL)
