Shuan Hwa and JFE Tie Up in Auto-parts Application Market in SE Asia

Taipei, Dec. 13, 2012 (CENS)--Shuan Hwa Industrial Co., Ltd., a major supplier of steel pipes for automotive applications, recently announced having signed a cooperation agreement with a subsidiary of JFE Group, a major steel conglomerate in Japan, to offer 5% stake to the Japanese partner, with the two parties saying the partnership will widen.

Shuan Hwa operates factories in Taiwan and Vietnam to supply major auto and motorcycle parts makers. A senior executive of the JFE subsidiary pointed out that the partnership will allow the two to aggressively tap the Association of Southeast Asian Nations (ASEAN) market. By 2015, Shuan Hwa's Vietnamese factory is expected to own 50% higher production capacity, he added.

The territorial disputes over the Senkaku Islands may have motivated the partnership as many Japanese companies are relocating production to Southeast Asia.

Y.W. Tsao, Shuan Hwa's chairman, pointed out that JFE is a major steel material supplier in Japan, and the tie-up is expected to help his company access ample supply of general steel materials, as well as prompt supply of high-end alloys. In addition, Tsao added, JFE is a major material supplier to many Japanese companies in Vietnam.

The JFE executive admitted that more and more Japanese auto-parts makers have moved production to Southeast Asia and hope to get direct material supply to cut costs. So, Shuan Hwa's Vietnam factory is expected to become a major cold-drawn steel pipe supplier in the region to Japanese vehicle-parts makers.

Tso stressed that Shuan Hwa is a pioneer of cold-drawn pipe maker in Taiwan, with factories in Taiwan and Vietnam that turn out monthly 1,500 tons and 1,000 tons, respectively, and that his company's advanced techniques in precision pipe making match those in Europe and Japan.