5 local fastener makers to set up aerospace fastener venture in Q2, 2004

Taipei, Dec. 17, 2003 (CENS)--Eyeing the lucrative aerospace market, five local fastener makers plan to set up an aerospace-fastener joint venture in 2004.

The planned fastener venture would be set up in the second quarter next year with an initial capitalization of NT$100 million (US$2.93 million at US$1: NT$34.1). The venture is expected to create production value of about NT$1 billion (US$29.33 million) within three years for high-end fasteners.

The five local fastener makers are Chun Yu Works & Co. Ltd., San Shing Fastech Corp., Ying Ming Industry Co., Ltd., Jau Yeou Industry Co. Ltd. And Anchor Fasteners Industrial Co., Ltd., all leading makers in the line.

Chun Yu president Lee Ming-huang said that his company has been increasing investment in R&D works, which can further strengthen his company's profitability amid a bright business climate or effectively cushion the impact of sluggish market demand on its operations.

San Shing vice president Wu Chung-yi said that the scheduled venture would be set up in a bid to tap the special-utility fastener business, which can generate lucrative profits and help upgrade the island's already matured fastener industry.

As to their roles in the proposed new venture, San Shing will concentrate on the development and manufacturing of specialty nuts; Chun Yu on wire materials and large-sized bolts; Jau Yeou on small-sized bolts; Ying Ming on large-size bolts; and Anchor on rivets.

Wu claimed that all the partners in the new venture have contacted major international buyers of aerospace fasteners to assure smooth sales for the new company after its establishment. In addition, Wu continued, the new venture will be 20% to 30% subsidized by the Ministry of Economic Affairs (MOEA) and get relevant technology support from the ministry.

According to Wu, the five venture partners would also allow their satellite plants to join the venture to accelerate the overall upgrading of the local fastener industry, create added values for products and prod the industrial transformation.

Jau Yeou chairman Sun De-jen said that Taiwan is one of the most important production bases of fasteners and the largest exporter of such products. With Taiwan's established advantages of high technical level and well-constructed central-satellite plant systems, Sun added, makers' actively venturing into the aerospace market is expected to force local makers to root their business operations deeper on the island and sustain a healthy development of the local fastenner industry.

San Shing's Wu, also the chairman of Taiwan Industrial Fastener Institute (TIFI), estimated that orders for Taiwan-made fasteners would grow about 10% next year but the local wire material supply from China Steel Corp may drop 10%.