| Prime News | | ![]() | ![]() | U.S. and N.T. Dollar Interest Differential Drops to Two-Year Low
Taipei, Sept. 20, 2007 (CENS)--With U.S. Federal Reserve Board (Fed) cutting the federal funds rate by a higher-than-expected level of 0.5 of a percentage point, domestic banks have lowered the one-year U.S. dollar interest rate to 3.95%, narrowing its lead over New Taiwan dollar interest rate for similar term to 1.485 percentage points, a two-year low.
The interest differential is only half the gap of three percentage points two years ago, but the N.T. dollar still has devalued 2% against the U.S. dollar so far this year, in sharp contrast with appreciation of most other currencies against the U.S. dollar, making the N.T. dollar the second weakest Asian currency, only outperforming the Indonesian Rupiah. The N.T. dollar, for instance, has devalued against Renminbi by 5.62% so far this year, or 15% from May 2006.
First Commercial Bank lowered its one-year U.S. dollar time deposit rate to 3.95% and one-month rate to 4.05% yesterday (Sept. 19), with many other banks taking similar move, including Bank of Taiwan, Mega Bank, Huanan Bank, Changhwa Bank, Taiwan Cooperative Bank, Land Bank of Taiwan, and Taiwan Business Bank. A Bank of Taiwan official noted that higher interest rate for long-term deposits than for short-term deposits indicates the possibility for the U.S. dollar interest rate to drop again in October, as well as shortage in short-term U.S. dollar fund.
Industry insiders noted that in 2003, one-year NT dollar interest rate was still 1.75 percentage points higher than U.S. dollar rate and the former dropped to a level equal to the latter in October 2004, before moving southward further, a phenomenon which has led to serious capital flight.
As a result, outstanding amount of foreign-currency deposits had reached a level equivalent to NT$1,375 billion at the end of June this year, according to the Central Bank of China, although the amount has been on the decline since then, due to narrowing of interest differential and upturn of the domestic stock market.
The abandoning of the U.S. dollar, though, has failed to bolster the N.T. dollar. So far this year, the N.T. dollar has devalued against most other Asian currencies, including 2% against the Korean Won, over 3% against the Japanese yen and the Singapore dollar, 5.62% against renminbi, and over 9% against the Filipino peso, only inching up 1% against the Indonesian Rupiah.
The weakness of the N.T. dollar is even more astonishing from a longer perspective. From May 20, 2000 up to now, the N.T. dollar has devalued over 20% against the Singapore dollar, the Malaysian Ringgit, the Thai Baht, and the Korean Won, over 15% against Renminbi and the Indian Rupee, over 7% against the Hong Kong dollar.
During the period, it has also devalued 8% against the U.S. dollar, as well as 40%-60% against the Australian dollar, the New Zealand dollar, the Canadian dollar, and the euro.
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| | ![]() | | | Revised 'Electricity Law' Opens Up Power Market
Taipei, Sept. 20, 2007 (CENS)--The Executive Yuan (the Cabinet) passed the revised draft of the "Electricity Law" yesterday (Sept. 19), opening up the domestic electricity market by allowing private investments in general power business, power generation, and power grid, in addition to envisioning setup of a power-supply coordination center.
While the revised law will break the existing monopoly of the power market by Taiwan Power Co., (Taipower), it also lifts shackles on the operation of the state enterprise, as it allows power firms to utilize its power cables for telecom transmission. The stipulation is expected to force Chunghwa Telecom to open up its fiber-optic telecom transmission networks to private rivals, leading to accelerated development of broadband networks.
Steve Ruey-long Chen, economics minister, reported that the revised law will be put into practice next year at the earliest, should it be enacted smoothly. The Energy Bureau, under the Ministry of Economic Affairs (MOEA), pointed out that except power generation, general power business and power grid will still be regarded as utilities and as such their rates will be subject to monitoring of the regulator.
Despite liberalization by the revised law, Taipower officials admitted that it won't be easy for private investments in power grid, due to the massive investment capital required and more importantly, the involvement of the complicate issue for obtaining of and compensation for private land.
The draft law rids Taipower the obligation to purchase excess power of private steam-power co-generation facilities, which it has claimed to be a money-losing business, despite incessant complaints by the latter over the existing rates.
Private power generators will be able to sell their power to Taipower, or sell to its clients via the Taipower grid or via its own grid.
The power-supply coordination center will be formed as a corporate body, undertaking power allocation according to the plan formulated by the MOEA.
The draft law also offers legal basis for providing compensations to owners of land beneath power transmission cables.
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| | ![]() | | | CAL Most Profitable Airline in August
Taipei, Sept. 20, 2007 (CENS)--Despite the impact of a mishap at the airport in Okinawa, Japan, China Airlines Ltd. (CAL) posted NT$11.849 billion (US$359.06 million at US$1:NT$33) in sales in August to be the most profitable air carrier domestically, up 7.8% year-on-year and hitting a historic monthly high.
Eva Airways Corporation, Taiwan's second-largest air carrier, registered NT$8.111 billion (US$245.78 million) in August sales, down 2.8% year-on-year. Far Eastern Air Transport Inc. saw a 7.4% year-on-year decline in August sales amounting to NT$682 million (US$206.66 million).
CAL noted it saw cumulative sales reach NT$82.796 billion (US$2.5 billion) in first eight months of this year, up 5.2% from a year earlier. The company's analyzed in the first eight months of this year, sales of passenger services accounted for 58% of total sales with the remaining 42% going to freight transport.
In terms of sales in August alone, the company saw sales of passenger services grow 7% year-on-year and that for cargo transport services up 5.05%. The company said it has reversed the awful situation in cargo transport services seen in the first half of this year.
CAL saw a 6% year-on-year decline in sales of cargo transport services in the first quarter of this year. But the decline span for the cargo transport services has shrunken to only 2% in the first half of this year and 0.7% in the first eight months of this year, which shows the company has improved cargo transport services in an effective way. The company believed it would make a turnaround in cargo transport services in October this year.
Because of the impact of two typhoons, CAL saw sales of passenger transport services down NT$60 million (US$1.81 million) in August from the preceding month's level.
EVA said it saw monthly sales decline 2% up to 3% in each of July and August. The company had cumulative sales of NT$60.87 billion (US$1.84 billion) in the first eight months of this year, down 1.8% from NT$61.993 billion (US$1.87 billion) the year earlier.
Far Eastern saw a 7.4% year-on-year slump in monthly sales in august because of the impact of two typhoons and the traditional "Ghost Month" festival domestically. The company posted NT$5.38 billion (US$163.03 million) in cumulative sales in the first eight months of this year, representing a slight growth from NT$5.342 billion (US$161.87 million) the year earlier.
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| | ![]() | | | Cathay United Bank Ratings Affirmed on Expected Turnaround
Taipei, Sept. 20, 2007 (CENS)--Taiwan Ratings Corp. (TRC) recently affirmed its "twAAA" long-term and "twA-1+" short-term counterparty credit ratings on Cathay United Bank Co. The outlook on the long-term rating is stable.
The ratings on Cathay United Bank reflect implicit support from the Cathay Group as well as the bank's satisfactory core earnings and adequate capitalization. Counterbalancing factors include the challenges the bank faces in developing new sources of revenue and enhancing its credit risk controls in a highly competitive operating environment.
Cathay Untied Bank is a core member of the Cathay Group, one of Taiwan's largest financial conglomerates. The bank's cross-selling and risk management benefit from its affiliation with Cathay Financial Holding Co. and other core subsidiaries. The bank is also an important distribution channel for the group's diverse financial products, contributing about 30% of first-year premiums to the group's life insurance unit, Cathay Life Insurance Co. in 2006.
TRC said Cathay Untied Bank is one of the more profitable banks in Taiwan, with an above-average ratio of pre-provision income to adjusted assets of about 1.6% in 2006. This is partly because of its leading position as a provider of securities settlement accounts, which generate cheap funding. The bank continues to develop non-interest revenue sources, which accounted for about 21% of its total adjusted revenue in 2006. The bank's profitability, as with many of its peers', felt the negative influence of a sharp rise in credit delinquencies on unsecured consumer loan products in 2006. The bank recorded a return on average assets of negative 0.3% in 2006, manly due to higher credit costs. The pressure on asset quality has since eased and the bank is likely to return to profitability in 2007.
TRC noted Cathay United Bank's capitalization is adequate. Its ratio of adjusted common equity to adjusted total assets declined to about 6% at the end of 2006, from 6.9% at the end of 2005, due to losses incurred in 2006 and business expansion activities. Total adjusted assets expanded by about 9.7% in 2006.
The stable outlook reflects the likelihood that strong group support will enable Cathay Untied Bank to maintain its credit profile at a level commensurate with the current ratings. The bank's satisfactory core earnings and adequate capitalization should be capable of absorbing a moderate increase in business and/or financial risk. In 2007, the bank's asset quality is likely to stabilize.
TRC said the direction of the ratings on the bank is closely tied to those on the Cathay Group. The outlook may be revised to negative if the group's operating performance deteriorates due to a more aggressive growth strategy, and/or the standalone credit profiles of the group's core members significantly weaken. The ratings on the bank may come under pressure if a change in the Cathay Group's strategy lessens the importance of the bank to the overall group.
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| | ![]() | | | Taiwan's Banks to Introduce Credit Cards Embedded in Handsets
Taipei, Sept. 20, 2007 (CENS)--Following three other local banks separately entering into alliances with other telecom providers on similar business front, Chinatrust Commercial Bank yesterday announced it will work with Chunghwa Telecom Co., Ltd. to roll out credit chips built in mobile phones.
Prior to Chinatrust, Taishin International Bank has teamed up with Far EasTone Telecom Co., Ltd. while Union Bank of Taiwan and Taipei Fubon Bank have partnered with Vibo Telecom Inc. and Taiwan Mobile Corp., respectively, to introduce mobile phones installed with the chips.
Phones built with the chips allow consumers to foot bills by swiping the phones over card sensors, making consumption more convenient than with existing credit cards.
The credit phone is an application of the Near Field Communication (NFC) technology, which is developed around the RFID (radio-frequency identification) technology. NFC is promoted not only to go into mobile phones but also other handheld gadgets including watches, personal digital assistants (PDAs), digital cameras, game consoles, notebook computers.
Built with NFC technology, these handheld machines can do data exchanges including bill payment.
The world's top two credit-card issuers—MasterCard Worldwide and Visa International Service Association—have begun issuing NFC-based cards, which eliminate the need of signature on bill.
Heavyweight cellphone maker Nokia has begun rolling out an NFC-enabled phone, codenamed 6131. The phone triples as credit card, shopping card and electronic ticket in addition to its talk functionality.
Nevertheless, banks offering credit phone functionality usually set credit ceiling limit. In Taiwan, the limit is set at NT$3,000 (US$90 at US$1:NT$33) in each transaction.
Contracted stores in Taiwan offering credit-phone shopping include convenient store chains 7-Eleven, FamilyMart and Watsons; department-store chains SOGO and Breeze Center; and hyper-store chains RT Mart and Carrefour.
Currently, shopping with credit phones in Taiwan is only beginning. Taishin, Union and Fubon plan to popularize the service next year. So far, they have offered the service only to 200 to 300 consumers as a pilot run.
Industry watchers expected credit phones to help Taiwanese banks shore up credit business, which has considerably fallen since last year when an unprecedented credit crisis hit the island.
Taiwan's credit-card market peaked with 45 million cards circulating before the crisis. Now the circulation volume has dropped to only 36 million cards.
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| | ![]() | | | TSMC Receives Increased Foundry Orders Amid Downbeat Market Outlook
Taipei, Sept. 20, 2007 (CENS)--After Nvidia, Advanced Micro Devices (AMD), Marvell and Qualcomm increased foundry orders to Taiwan Semiconductor Manufacturing Co. (TSMC), NOR-memory chipmaker Spansion has recently decided to outsource 65-nm chip foundry production to the No.1 silicon-foundry supplier.
Taiwanese industry watchers pointed out the announcement somewhat waters down the rising downbeat atmosphere over the outlook of global semiconductor market for the fourth quarter.
Spansion's executive vice president and chip marketing and sales officer, Tom Eby, said his company decided to contract TSMC to build its 65-nm NOR-memory chips in the fourth quarter and will make foray into mainland Chinese market in cooperation with MediaTek by putting its chips together with MediaTek's.
Eby noted his company has extended development partnership with TSMC to 65-nm, 45-nm and even 32-nm processes after it transferred 90-nm and 110-nm processes to TSMC. He added that his company had sent a research and development team to a TSMC facility in the Southern Taiwan Science Park.
Eby said he was happy to see MediaTek acquire ADI's cellphone chip operation and his company completed design-in of the chips to match with MediaTek's chips in August and was being validated at its customers.
Industry watchers forecast global PC market to grow strong in the fourth quarter partly because some new models installed with powerful graphics chips from Nvidia and chipsets from AMD will come out. The two companies have increased foundry orders for the production of the chips to TSMC to cope with anticipated demand surges.
Wireless-chip vendors Qualcomm and Marvell have also decided to increase foundry orders to TSMC in the fourth quarter.
Foreign institutional investors projected TSMC's shipments of silicon wafers to increase 5-7% next quarter thanks to added orders.
In August alone, TSMC saw its revenue hit a new high of NT$30 billion (US$909 million at US$1:NT$33). The August result was up 1.5% from a month earlier and 8.1% from the same period of last year. In the first eight months this year, the company's total revenue came to NT$199.3 billion (US$6 billion), losing 7.4% year on year.
Institutional investors originally projected TSMC's revenue for August at NT$29.8-30.05 billion (US$903-910 million). The August result helped the company accomplish over 68% of its goal for this year. Accordingly, the company's vice president and spokesperson, Lora Ho, said TSMC has raised its revenue projection for the third quarter to NT$87-89 billion (US$2.63-2.69 billion), slightly up from the original projection of NT$85-87 billion (US$2.57-2.63 billion).
Industry insiders indicated TSMC's capacity utilization rate would hit 100% in the fourth quarter from 83% posted in the first quarter this year. Taiwanese IC insiders pointed out that the foundry giant has already completely sold out its 200-mm and 150-mm capacities so far.
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| | ![]() | | | TYC Reports Lucrative Operation Results for First 7 Months
Taipei, Sept. 20, 2007 (CENS)--TYC Brothers Industrial Co., Ltd., a major auto-lamp exporter in Taiwan, recently reported lucrative operation results for the first seven months of the year.
TYC registered pretax earnings of NT$130 million (US$3.94 million at US$1: NT$33) in July and NT$390 million (US$11.82 million) in the first seven months (translating into accumulated earnings per share, or EPS, of NT$1.51, or US$0.05).
The auto-lamp maker attributed the lucrative results in July to sales growths in North America and European markets, though the month is a traditional off period.
TYC pointed out that Certified Automotive Parts Association (CAPA)-certified aftermarket (AM) replacement auto-parts have become a market mainstream, especially after the final judgment made by the high court for the famous State Farm case. Some, auto insurance firms in North America, including major players, are expected to announce to adopt CAPA-certified AM auto lamps, TYC said.
The company claimed that it offers over 100 sets of CAPA-certified auto-lamp models, the most among local counterparts. According to TYC estimates, its number of CAPA-certified lamp models would reach 185 in this year, while the figure is expected to increase to about 300 in 2008.
In addition, TYC has begun developing AM parts sales in mainland China market in this year. Currently, the Taiwan-based auto-lamp maker is utilizing a joint-venture plant set up with Changchun FAW Sihuan Automobile (in Jilin Province to supply original equipment, or OE, auto lamps to automakers) as its AM-parts production base and plans to upgrade its shareholding in the venture to 70% in this year.
TYC is actively developing AM auto-lamp sales in big cities such as Guangzhou (Guangdong Province), Shenyang (Liaoning Province), Beijing, and Shanghai, in which regional distributors have been found.
The Taiwan-based auto-lamp maker is also planning to set up an AM lamp warehouse in Kunshan (Jiangsu Province) because both the marine and land transportation there are convenient. TYC said that the Kunshan warehouse is also expected to be one of its future Chinese export bases to supply AM products to the U.S., Europe, and Russia.
This year, TYC would develop 12 sets of molds for AM auto lamps in China, and the company's AM business across the Taiwan Strait is expected to turn profitable in 2008.
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| | ![]() | | | AU Optronics Inaugurates New LCM Plant in Xiamen, China
Taipei, Sept. 20, 2007 (CENS)--AU Optronics Corp. (AUO), the largest thin film transistor-liquid crystal display (TFT-LCD) panel maker in Taiwan, recently inaugurated its second LCD module (LCM) production base in Xiamen, Fujian Province of mainland China.
The new LCM facility will manufacture small-, medium-, and large-sized LCD modules. AUO said that this new manufacturing facility would provide more responsive and prompt services to customers in southern China and offer more extensive supports to the fast-growing economic development of the Xiamen Special Economic Zone.
Since entering the China market in 2002, AUO has been steadily developing its business and services in line with the company's overall global growth strategy, the company said. The new Xiamen LCM facility is a vital part of AUO's global manufacturing operation system, enabling AUO to respond more rapidly and provide undiluted focus on the needs of its customers, the company said. AUO is looking forward to the tremendous business growth of its Xiamen manufacturing facility, which will provide easily accessible support for customers in Xiamen and surrounding areas.
K.Y. Lee, chairman of AUO pointed out that as China continues to shape the global economic landscape, his company's China customers must have access to real-time and immediate support in order to be competitive and continue to grow their businesses. "We recognized China's potential many years ago and have steadily increased our investments in the market in the past six years. The establishment of our Xiamen manufacturing facility will strengthen our commitment to the dynamic China marketplace and complements our current global manufacturing and logistical operations," Lee said.
Fred Hsieh, general manager of AU Optronics (Xiamen) Corp., said that Xiamen is one of the most economically dynamic cities in Fujian Province, and the city offers great potential. He is confident in the future development of the Xiamen LCM plant, saying that Xiamen ranks high among other locations with an excellent combination of infrastructure, land- sea- and-air traffic networks, geographic location, climate etc."
With a building area of 250,000 square meters in Xiamen Torch Hi-tech Industrial Development Zone, AUO's Xiamen LCM facility began production in April. It is estimated that by the end of 2007 the total monthly production capacity would reach 500,000 units of large-sized and 5,000,000 small- and medium-sized LCMs.
With the joining of AUO's Xiamen LCM plant, AUO's total LCM capacity in China will increase by 50%, including both TV-panel and small- and medium-sized modules. AUO currently employs approximately 3,500 employees in Xiamen.
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| | ![]() | | | Taiwan's FHCs Saw Profits Drop in August
Taipei, Sept. 20, 2007 (CENS)--Impacted by the U.S. sub-prime mortgage storm, Taiwan's stock market turned bearish in August, which as a result undermined the profits earned by financial holding companies (FHCs) here.
According to reliable sources, Taiwan's banks launched investments totaling NT$40.38 billion (US$1.22 billion at US$1 = NT$33) in the U.S. sub-prime mortgages and NT$30.162 billion (US$914 million) in linked investments. It is estimated that the banks here would suffer integrated losses of NT$2 billion (US$60.6 million) in such investments.
In August alone Shin Kong Financial Holding Co., China Development Financial Holding Co., Jih Sun Financial Holding Co., and Yuanta Financial Holding Co. saw their incomes turn red from black, suffering respective losses of NT$1.024 billion (US$31.03 million), NT$698 million (US$21.15 million), NT$216 million (US$6.55 million), and NT$40 million (US$1.21 million).
In the same month, Taishin Financial Holding Co., Chinatrust Financial Holding Co., Fubon Financial Holding Co., Mega Financial Holding Co., and SinoPac Financial Holding Co. all experienced a sharp drop of 50%-90% in profits.
In the first eight months, Cathay Financial Holding Co. accumulated profits of NT$29.612 billion (US$897.33 million), the highest among the 14 FHCS and far ahead of its followers.
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| | ![]() | | | Taiwan's Leading Garment Maker Sees Record Revenues of NT$1.487 B. in August
Taipei, Sept. 20, 2007 (CENS)--Thanks to successful global deployment and the integration of up-, mid- and down-stream operations, Makalot Industrial Co., Taiwan's leading garment maker, saw its revenues hit a record monthly high of NT$1.487 billion (US$45.06 million at US$1 = NT$33) in August of this year.
Chou Li-ping, chairman of Makalot, attributed the company's good performance to the synergy resulting from the emphasis on R&D, the establishment of self-branded garments, and the enhance in marketing capability.
In July of the year the company received orders of 756,000 dozens of garments, the highest of its kind ever recorded and the orders for September and October may grow to 770,000 dozens each.
Last year the company raked in combined revenues of NT$12.565 billion (US$380.76 million), and this year the revenues are expected to chalk up by 25% and profits jumped by 40%.
Before 2004, Makalot had set up footholds in nine countries and reduced its production bases in five countries in 2005, when global textile quotas were nullified. This year the company has adjusted its global deployment for garment manufacturing and enhanced the ratio of its production volume in China, Cambodia, and Vietnam to 55%-60% from last year's 50%, with the estimated contract output of garments in the said three to reach 8-8.5 million dozens.
Recently Makalot has been laying more emphasis on ODM (original design manufacture) products and boasted the gross profit rate of its ODM products to reach 18.05% in the first half of this year, up 2.5 percentage points from the corresponding figure of last year. The company forecast that the percentage would break 20% level soon.
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| | ![]() | | | Yageo to Boost Monthly Output of GPS Active Antennas to 1 M. Units by 2008
Taipei, Sept. 20, 2007 (CENS)--In light of market potential for global positioning system (GPS) devices, Yageo Corporation, the largest supplier of passive components in Taiwan, has decided to sharply boost its monthly production capacity for GPS active antennas by 900% to one million units by the end of 2008, according to company sources.
Recently, Yageo unveiled eight new GPS active antennas, which are all designed, developed and manufactured in house, boast high interconnection with other antenna products, and can be widely used in mobile phones and other GPS devices. The firm has projected its sales of antenna lines to grow by 30% this year.
Yageo noted that since the U.S. Federal Communications Commission introduced related regulations following the "September 11 event," retailers in the market have been required to provide mobile phones coupled with positioning systems for users in emergency starting 2006. This has fueled market demand for GPS modules used in mobile phones.
In addition, another huge business potential is that shuttle vehicles for use in Beijing Olympic Games will be installed with GPS. Yageo said that it already launched circular polarization antennas and linear polarization models, and now has unveiled GPS active antennas to round out its deployment in the market for GPS antenna solutions.
Starting this August, Yageo has seen its orders for antenna products keep growing, and started mass producing and delivering its GPS active models, with shipment reaching 100,000 units per month. The firm estimated that the figure will increase to one million units by the end of 2008.
In addition to GPS antennas available in a variety of materials, Yageo has developed and manufactured circuit boards used for active antenna modules in house to aggressively explore the market for GPS. Besides, the firm has also set up five bases for testing hardware around Greater China area to cut R & D procedures and to ensure integrated operation of its modules under development.
The firm indicated that aside from GPS applications, its antenna products can also be used in blue teeth and wireless network. At the moment, antenna products commands less than 5% of the firm's total sale revenues, but the percentage is expected to rise to 30% this year. | |
| | ![]() | | | HTC Won Big Orders From Sony Ericsson
Taipei, Sept. 20, 2007 (CENS)--High Tech Computer Corp. (HTC), a Taiwan-based supplier of mobile phones, has won a big order from Sony Ericsson to develop and manufacture the latter's first smartphones embedded with Microsoft's operating system, which are scheduled to be on sale in the second half of next year, according to company sources.
Sony Ericsson has ordered one million new smartphones, which will feature extreme thinness and eye-catching looks, for sales in the global market. Based on HTC's existing annual shipment of 10 million handsets, the order will push up the firm's shipment by 10-20%.
In fact, Sony Ericsson unveils only one new smart phone embedded with Symbian's operating system every year on average, making the brand unable to meet ever-changing demands for new products in the market.
By contrast, other competing models, which adopt Microsoft's operating systems, are available in a larger variety and are popular with business people. Thus, although one of big shareholders in Symbian, Sony Ericsson has decided to adopt Microsoft's operating systems in its smartphones.
After researching Microsoft's operating systems and setting up its R & D center for models using Windows Mobile near Microsoft's headquarters, Sony Ericsson has also determined its ODM (original design manufacturing) partner.
Sony Ericsson has selected HTC out of quite a few suppliers of smartphones and PDA phones, as HTC is versed in making smartphones with Microsoft's operating systems. Sony Ericsson's first smartphones with new operating systems will be totally designed and manufactured by HTC, and will feature metallic and thin appearance and slide design.
Insiders in the sector noted that Sony Ericsson, which has heavily exerted its influence on the market for mobile phones, is supposed to order more than one million new smartphones with HTC initially, giving a strong impetus to HTC's annual shipment.
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| | ![]() | | | Taiwan's Recycling Industry: Finding Treasure in Trash
Those involved in the recycling industry believe that one man's trash is another man's treasure, and that just about anything can be turned into a profit. In Taiwan, their greatest treasures are junked automobiles, motor scooters, bicycles, home appliances, and computers, as well as PET bottles.
According to the Environmental Protection Administration (EPA), the island's recyclable materials, if actually recycled, can generate a value of between NT$25 billion and NT$50 billion (US$757.5 million to US$1.515 billion at NT$33:US$1). Recycling, obviously, can be a lucrative business.
EPA statistics show that recycling in Taiwan has grown from just 5.87% of all trash a decade ago to 15.55% in 2002 and 27.72% in 2006—far higher than the original goal of 18.5% for the year.
Insiders say that recyclable waste actually constitutes a mountain of "green minerals" from which miners can extract precious treasure. Taiwan discards about 350,000 autos and motor scooters a year; each of those autos offers about 600 kilograms of reclaimable steel, as well as other valuable metals.
Taiwan has generated more than 268 million PET bottles annually in recent years, and has reclaimed 40-50 million of them. The reclaimed bottles weigh a total of 90,000 tons or so, and can be used to produce plastic materials worth more than NT$2.5 billion (US$75.75 million).
Much more valuable, and much more desired by professional recyclers, are the valuable metals in electronic products—gold, lead, platinum, titanium, zinc, and lithium, among others. From each 10,000 discarded computers, for example, recyclers can extract about a kilogram of gold. Some waste processors earn more than NT$1 million (US$30,303) a month by reclaiming metals from waste electronic products.
Waste can also be used for other purposes. Motherboards can be turned into a powder that is used to make artistic statues and religious icons. Discarded tires can be used to make shoes or plastic bricks for construction purposes.
Taiwan currently has 560 registered recycling firms and processors. The first electronics recycling firm to be listed on the island's over-the-counter market is the Super Dragon Technology Co., which deals mainly in electronic parts and products rejected by leading local manufacturers, mostly motherboards, printed circuit boards, and IC boards. From those rejects, it extracts valuable metals such as gold, platinum, silver, and copper.
In the first half of this year Super Dragon chalked up profits of NT$150 million (US$4.54 million), yielding NT$2 (US$0.06) in earnings per share.
The "Green Energy Sector," in which Super Dragon is categorized on the local bourse, is a rising star with increasing popularity among local investors. Super Dragon recently saw its share price break through the NT$100 (US$3.03) mark. (JL, Sept. 2007) | |
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