Teco ties up with Ta Ya to produce motors in Vietnam

Taipei, Dec. 17, 2004 (CENS)--Ta Ya Electric Wire & Cable Co., Ltd. Will tie up with Teco Electric & Machinery Co., Ltd. To set up a joint venture to produce motors in Vietnam in 2005.

Both sides will raise a fund of US$2.5 million to establish a new company and set up a motor plant in Vietnam. In the meantime, they will also jointly build a plant in mainland China to produce brass materials.

In the new venture, Ta Ya will hold a 40% stake and Teco the remainder, with the latter responsible for operations. The new venture is expected to commence mass production in the fourth quarter of 2005. Ta Ya said it selects Teco as partner to produce motors in Vietnam because Teco is one of Taiwan's most professional manufacturers of the products.

Ta Ya, Taiwan's largest producer of electric wires and cables, said it would integrate its core business overseas in addition to focusing on the production of specialty electric wires, next year.

Shen Shang-hung, president of Ta Ya, said Vietnam is a market worthy of his company's development. He noted his company would begin mass production of enameled electric wires in its second plant in Vietnam in the first quarter of next year.

Over the past several years, Ta Ya has been expanding overseas production by concentrating on its core business of electric wires.

Shen noted his company is making all-out efforts to develop high-value-added products to distinguish from those made by the developing nations which provide lower production costs. He said his company would vie for the orders of 161-kilovolt high-voltage electric wires and speed up the development pace of the 345-kilovolt ultra-high-voltage products next year.

Shen said his company would continually cooperate with middle- and downstream firms to make vertical integration. But Ta Ya will act as a pure investor if it prepares to get involved in a new venture that it isn't familiar with.

Ta Ya said it would focus on stabilizing production and sales of two new plants, each in mainland China and Vietnam, in the first half of next year. After the production and sales of these two plants are stabilized, the company will assess the feasibility of setting up a third plant of enameled electric wires possibly in northeastern China.