Machine-tool Score Orders Switched From Japan

Machine-tool Score Orders Switched From Japan

Taipei, Sept. 20, 2010 (CENS)--Taiwan's leading manufacturers of machine tools, including Hiwin Technologies Corp., Anderson Group, Taiwan Takisawa Technology Co. and Tongtai Machine & Tool Co., are seeing robust growth in orders amid sharp appreciation of the Japanese yen against the U.S. greenback.

The rise in Japanese currency has forced foreign buyers to switch orders from Japan to Taiwan, which boasts comparatively steady currency and supplies competitive products with favored prices.

According to statistics compiled by the Department of Statistics under the Ministry of Economic Affairs, Taiwan received US$4.026 billion (US$127 million at US$1:NT$31.7) worth of orders from Japan in July, hitting the second-highest record in history. Accumulative exports from Taiwan to Japan amounted to US$10.18 billion in the first seven months of this year, hitting an all-time high record.

Of domestic listed machine-tool firms, Hiwin, Tongtai, Anderson and Hota Industrial Mfg. Co. all saw sales in August hit the year's high. Kao Fong Machinery Co., Goodway Machine Corp. and Taiwan Takisawa Technology Co. all saw aggregate sales in the first eight months of this year double year-on-year.

Concentrating on the supply of machine-tool precision components, Hiwin has benefited most from the appreciation of the Japanese Yen because its major rivals are such Japanese counterparts as THK and NSK. Hiwin said it has fully utilized production capacity with a new plant in Yunlin County of central Taiwan recently inaugurated to boost capacity. An institutional investor believed Hiwin will be able to score NT$6.02 in after-tax earnings per share this year.

A major supplier of CNC (computerized numerically controlled) lathes and PCB (printed circuit board) drilling machines, Taiwan Takisawa scored NT$313 million in August sales, a record high. The company is expected to register NT$3.23 in after-tax EPS this year.

Bert M.H. Huang, president of Victor Taichung Machinery Works Co., said his company has indeed benefited from the orders switched from Japan. For instance, the company has recently received inquires from Japan for procurement of metal sheets and other new orders are undergoing negotiations.

An industry insider noted makers of machine-tool components, lathes and drilling machines will benefit the most from the appreciation of the Japanese yen because they can ship products within half a month to a month after receiving orders.