Far East Machinery Group targets 30% sales growth for 2005

Taipei, April 13, 2005 (CENS)--After turning profitable last year, Far East Machinery Group, which specializes in the production of steel pipes and machine tools, has set a goal to obtain a 30% annual sales growth this year.

In addition to the sales projection, the group will transform itself into an industrial holding company by spinning off its profitable units as independent ones for listing on the domestic stock market.

Chuang Kuo-hui, chairman of the Far East Machinery Group, said the domestic machine-tool industry would have a bright outlook in the years to come as the machine tools made in Taiwan have better quality than those made in mainland China and the average price of the products made here is lower than those made in Japan.

Thanks to the prosperous development of the global steel and machine-tool sectors, Far East Machinery Group obtained NT$2.8 billion (US$88.88 million at US$1:NT$31.5) in total sales last year. The group has set a goal of grabbing NT$4 billion (US$126.98 million) in sales this year.

Chuang noted Taiwan's machinery industry this year can hardly perform as well as last year because of the impact of the macro-economic control policy adopted by the mainland China government since April 2004.

Another unfavorable factor affecting the performance of the domestic machinery industry, according to Chuang, is the appreciation of the New Taiwan dollar against the U.S. greenback. He said domestic machinery manufacturers have lost many export orders because of the sharp rise of local currency since the beginning of this year and they see the bottom line at NT$30:US$1.

But Chuang stated the currency appreciation won't affect his group too much, as it has launched a spate of niche products to help create handsome profits and because the global demand for steel pipes is still on the rise. He said these niche products include CNC (computerized numerically controlled) lathes, vertical CNC turning centers for processing automobile rims, and CNC column-moving boring/milling machines.