China Electric Revs Up Investments in Profitable Lighting Business

Taipei, June 1, 2006 (CENS)--China Electric Mfg. Corp. recently decided to enhance investments in profitable lighting business including light-emitting diodes, solar cells for lamps and cold cathode fluorescent lamp (CCFL) in hope of further boosting profits.

The Taiwan' s No.1 lamp manufacturer reported after-tax income of NT$300 million (US$9.3 million at US$1:NT$32) on revenue of NT$3 billion (US$93.7 million) in 2005. Taiwanese industry watchers forecast local lamp manufacturers to hardly ramp up profit this year since traditional-lamp business was already crowded and was eroded by mainland China-made counterfeited products.

According the company' s executives, the firm planned to spin off its LED-business unit into an independent company, direct American technology into its solar-cell business unit and enhance cooperation between its in-house CCFL business unit and CCFL subsidiary Wellypower Optronics Corp.

The executives said yesterday that the company has invested NT$1 billion (US$31.2 million at US$1:NT$32) in a CCFL factory, whose maximum output is projected at 1.5 million lamps a month. The factory will begin volume production in the first quarter next year mostly thanks to orders from Japanese supplier CKD. The factory will form synergy relationship with Wellypower.

China Electric holds a 23% stake in Wellypower, whose share price has surged since its initial public offering (IPO) on Taiwan' s over-the-counter market last year.

In light of lucrative business in the LED lighting market, the company will develop its LED products with all-out efforts. The company has opened an LED research and development center to develop LED modules. The firm will reorganize the business into an independent company in which it will hold a 100% ownership only in the initial stage. Eventually, it will open investments in the affiliate to the public.

China Electric' s solar cells will be installed in its street lamps and related products.

As to its traditional-lighting business, China Electric is constructing a US$6 million lighting-fixture venture in Vietnam in cooperation with Taya Electric Wire & Cable. The factory will begin volume production in the first quarter next year and its products will target the Southeast Asian market in the long run.

Taya, a Taiwanese manufacturer of electrical wires and electrical parts for electronic ballasts that mostly go into China Electric' s products, has developed distribution outlets in the Southeast Asian country for many years, making it an advantage for the joint venture.