Tongtai of Taiwan Builds Factory to be Top-20 Machine Tool Maker by 2020

Tongtai Machine & Tool Co., Ltd. recently broke ground to construct its second factory at the Luzhu Science Park in the Southern Taiwan Science Park as part of its plan to be a globally top-20 machine-tool maker by 2020 by building high-end machines for the automotive and aircraft industries.

The new factory is scheduled to start production in the second quarter of 2016, to mainly turn out horizontal machining centers, horizontal boring machines, five-axis horizontal machining centers, and heavy-duty milling machines.

Tongtai will spend as much as NT$600 million (US$19.35 million) to build this factory, which will help boost corporate revenue to NT$20 billion (US$645.16 million) by 2020 from 2015's projected NT$10 billion (US$322.58 million), with predicted contribution of NT$1 billion (US$32.25 million) in revenue initially.

The new factory will build horizontal-type automated production lines for the automotive industry, and heavy-duty horizontal machining centers and boring machines for the aircraft industry.

The company expects the new factory to help swell its revenue from sales of machines tools for the aircraft industry, based on studies by market consultancies that global demand for such processing machines to gain momentum in 2016.

Tongtai's first factory at the Luzhu park is busy assembling aircraft-industry processing machines to handle plentiful orders. Its affiliate, Asia Pacific Elite Corp., will also move to the park to produce high-speed five-axis crane-type machines for the aircraft industry.

Tongtai Chairman R.H. Yen says the company will move part of the components processing lines at its manufacturing site in Hunei District in Kaohsung City, the southernmost major city in Taiwan, to the new factory to supply its machine tools.

The Flexible Manufacturing System (FMS) developed by Tongtai in-house will be the model for the new factory, to enable the new factory to run throughout nights and on holidays on the automation system.

Hit by underselling competition from European and Japanese manufacturers, whose competitiveness has been bolstered by the weaker euro and yen, Tongtai saw its consolidated revenue for the first quarter decline 3.15 percent from the same quarter of last year, despite still holding NT$2 billion (US$64.51 million) of undelivered orders.

Yen says the company is vigorously developing high-end, special-purpose machines that are sought-after and have higher profitability, instead of engaging in underselling to bolster revenue, and that such machines are quite popular among its customers.

The company's high-performance machines have been displayed at several prominent trade shows so far this year, including the Taipei International Machine Tool Show (TIMTOS) and the China International Machine Tool Show (CIMT); while its acquired French firm PCI-SCEMM showed up at CIMT the first time to highlight the company's high-end machines.