Automotive components maker Hota Industrial Manufacturing Co (和大工業) on Friday held a beam-raising ceremony at its new manufacturing plant in the Chiayi Dapumei Precision Machinery Park (嘉義大埔美精密機械園區).
The new facilities include a smart plant with automated production lines and a dormitory for 300 employees.
BIG INVESTMENTS
Photo: Lin Yi-chang, Taipei Times
Hota is investing NT$4.2 billion (US$140.23 million) in the new plant and aims to start production by the end of next year to supply components for electric vehicles for US and European clients.
The company, which supplies Tesla Inc and BorgWarner Inc, already operates two plants in the same industrial park.
Together with the new plant, Hota has so far invested NT$14 billion in the park, Chinese-language media reported on Friday.
The company has proposed investing an additional NT$8 billion in a fourth plant with eight to 10 production lines and building an industrial museum in the same park, Hota chairman David Shen (沈國榮) said to the Commercial Times.
However, due to COVID-19 lockdowns in Europe, the US and other countries, major automakers have decreased production, so Hota is expecting lower revenue this year, Shen said.
In the first four months of this year, cumulative revenue fell 20.78 percent year-on-year to NT$1.58 billion, company data showed.
However, with reopenings in Europe and the US, major automakers are resuming production and have begun to replenish their inventories, Shen said.
Hota’s business is expected to stabilize and would gradually return to a growth track next month, he added.
The company on Thursday reported a net income of NT$143.7 million in the first quarter, down 25.3 percent year-on-year, with earnings per share of NT$0.56.
POSITIVE OUTLOOK
Due to decreased demand and lower capacity utilization in late March, the company’s gross margin fell to 26.42 percent and operating margin fell to 11.53 percent in the first quarter, compared with 29.22 percent and 15.17 percent in the same period of last year respectively.
Analysts said that Hota’s revenue is expected to grow in the third and fourth quarters, driven by production increases in Tesla’s China-based factories, rebounding orders for electric vehicles from other brands and the recovery of the US auto market.
Hota’s shift to automated production lines might also drive a higher gross margin in the latter half of the year, analysts said.
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