Rexon Ind. Ties Up With Peugeot to Tap DIY Machine-tool Market

Taipei, Dec. 22, 2008 (CENS)--Rexon Industrial Corp., a world-leading maker of bench-top and stationary machinery in Taiwan, recently announced its partnership with the French Peugeot Group to tap the European DIY (do-it-yourself) machine-tool market.

Rexon said it has sold its European subsidiaries, including Mejix in France and RE in Germany, to Peugeot Group's Metland to acquire a 3% stake in Metland, with the deal stipulating Rexon to be the priority supplier to Metland.

H.C. Cheng, vice president of Rexon said the disposal of subsidiaries in France and Germany will help his company cut losses in non-core businesses. As the priority supplier to Metland, Rexon can possibly realize substantial sales growth in woodworking machinery in Europe. He predicted his company will achieve better performance in 2009 in light of plunging raw material prices and rising prices for its product lines.

Cheng said Rexon sells own-brand woodworking machinery directly to the large-sized hardware chains in the U.S. and Europe through its overseas subsidiaries of Mejix and RE. Because of insufficient product range and limited scale of economy, Mejix and RE saw annual sales reach only eight million euro and four million euro, respectively, over the past several years.

Sluggish sales have seen Rexon post after-tax net losses of NT$526 million (US$15.79 million at US$1:NT$33.3), or a net loss of NT$2.46 (US$0.07) per share, in the first three quarters of 2008.

Cheng estimated his company will be able to see recovery of gross operating profit margin beginning from the fourth quarter of 2008 as it has been raising product prices since July, with such recovery in the operating profit margin to help the company cut operating losses in future.