CSC of Taiwan Buys Stake in Fukuta to Strength Ties with Tesla Motors

Through buying stake in Fukuta Elec. & Mach. Co., Ltd., a Taiwan-based motor manufacturer and exclusive supplier to Tesla Motors, a California-headquartered electric vehicle maker, Taiwan's China Steel Corp. (CSC), the island's largest steelmaker by size, looks to strengthen ties with the American EV maker to profit from the business.

Not long ago, CSC announced its NT$352 million (US$11.73 million) reinvestment in Fukuta for a 25.3% stake to become the latter's largest shareholder, basing its decision not just because Fukuta has been a major customer of electrical steel sheets since 2007, but also the exclusive motor supplier for Tesla Motors.

Since starting to supply its first motor for the Tesla S, the world's first fully electric sportster in 2008, Fukuta has become increasingly known for excellent capabilities, with its annual turnover likely to exceed NT$1.2 billion (US$40 million) this year and its motor shipments to reach 50,000 units and then double to 100,000 units in 2015.

To keep up with brisk shipment growth, Fukuta has started up its brand new NT$300 million (US$10 million) factory with output of 300,000 motors a year, with plans to invest NT$1 billion (US$33.33 million) to set up a bigger plant within three years, a positive indicator that drives CSC to buy majority stake in Fukuta through its subsidiary to reinforce business ties.

CSC's chairman, J.C. Tsou, said earlier that Fukuta is a very important customer of his company's electrical steel sheets and has great growth potential, which CSC has decided to help maximize with the stake purchase, whose capital would also help  greatly enhance production capacity and capabilities.

Tsou also confirmed that CSC had just sent its high-ranking executives to the U.S. to visit Tesla Motors to further cement  cooperation, believing the tri-party partnership to see positive results in the future. Worth mentioning is that CSC has also teamed up with Japan's Panasonic to construct a large battery factory in Nevada, indicative of its ambition to narrow ties with Tesla Motors.

Actively expanding business scope and improving operational efficiency, CSC scored consolidated revenue and net profits of NT$347.828 billion (US$11.594 billion) and NT$15.981 billion (US$532.7 million), respectively, last year. (SC)