Zeng Hsing Invests US$5 M. to Expand Output in Vietnam

News - Zeng Hsing Industrial Co., Ltd. (stock code: 1558), one of Taiwan’s leading manufacturers of sewing machines, has recently resolved to invest US$5 million to expand production facilities in Vietnam. Investment effects will begin fermenting in the second half of 2013.

Thanks to the production expansion in Vietnam, Zeng Hsing will see its annual production capacity reach over 1.6 million sets of sewing machines from its new and old plants.

With years of development, Zeng Hsing has become one of the world’s largest contract manufacturers of sewing machines. At present, the company has set up production bases in Taichung City of Taiwan, Zhangjiagang of China, and Vietnam. Of them, the Taichung plant focuses on the production of household medium- and high-tier sewing machines. The Zhangjiagang plant rolled out 1.6 million sets of sewing machines in 2011, and the Vietnam plant currently has production capacity of one million sets of sewing machines.

Faced with the increased labor and production costs in mainland China, Zeng Hsing has decided to switch investment focus to Vietnam. In addition, its rival competitor—Brother has also set up production site in Vietnam.

Zeng Hsing noted it has procured a land space of 720,000 square feet at the Singapore Industrial Park nearby Ho Chi Minh City, Vietnam to set up a new plant there.

Institutional investors believe Zeng Hsing has over 27% market share in the worldwide sewing machine market last year. Zeng Hsing shipped 2.6 million sets of sewing machines in 2011, up 10% year-on-year from 2.38 million.

Zeng Hsing said it has close ties with Singer, the world’s No. 1 brand in the sewing-machine arena. Zeng Hsing focuses on development and contract production while Singer concentrates on sales and management. At present, Singer accounts for over 60% of Zeng Hsing’s contract production.

Institutional investors forecasts Zeng Hsing will strive to ship 2.7 million sewing machines in 2012 to meet the 3% annual growth goal.