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February 04, 2014 01:00 AM

Taiwan's Ju Teng: factory will be world's biggest for composite smartphone cases

Steve Toloken
Assistant Managing Editor
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    Taiwan's Ju Teng International, a major manufacturer of laptop casings, is investing at least $10 million in China to set up what it says will be the largest factory in the world for high-volume plastic-fiber composite smartphone and tablet covers.

    The facility, which recently opened, will have more than 100 rapid molding production lines from French equipment maker RocTool, with the goal of producing 1 million composite thermoplastic and glass or carbon fiber parts per month when fully operational, the companies said in a Feb. 3 announcement.

    "At present on the world scale, it represents the largest production of composite parts," said RocTool CEO Alexandre Guichard, based in Le Bourget du Lac, France.

    Ju Teng corporate offices in Taipei, Taiwan and Hong Kong were closed because of the Lunar New Year holiday, and the companies did not identify where the new facility would be located.

    But publicly-listed Ju Teng told the Hong Kong Stock Exchange in January that it was building a new casing plant in Chongqing, in western China.

    It also said in filings last year that it was building larger manufacturing facilities in Suzhou, Jiangsu Province. It suggested the expansions were sizable, with at least HK$737 million (US$95.0 million) invested in the two locations.

    Ju Teng, which claims to have more than 30 percent of the global market for laptop casings, said composites technology will be increasingly important for computers and smartphones as manufacturers look for lighter, thinner and more tactile materials to differentiate their products.

    "The major brands of tablet and smartphones are actively seeking ways of differentiation and performance improvement," said Li Yu Cheng, Ju Teng chief executive, in the statement. "The difference therefore leans more and more towards the covers, their materials, weight, thickness."

    The investment is also part of a Ju Teng strategy to expand from the laptop market into smartphones and tablets, where it sees more long-term growth.

    Ju Teng said it made more than 1 million smartphone parts using RocTool's technologies in the fourth quarter of 2013, and it disclosed in August that it had secured an order from a large United States-based maker of smartphones.

    The companies said the RocTool technology will help the company reduce production time, because it heats molds by induction, and allow parts as thin as 0.5 millimeters.

    "Ju Teng has developed significant production capacity in China and this partnership is targeting new markets for prestigious brands on their very high volume mass production programs," the companies said in their statement.

    RocTool also said it had established a tech center in the Taiwanese city of Taichung, and set up a subsidiary there.

    A December report from Hong Kong-based securities firm China Everbright Research Ltd. said Ju Teng has the largest share of the world market for laptop cases, ahead of Taiwanese rivals Hon Hai Precision Industry Co. Ltd. – more widely known as Foxconn Technology Group -- and Huan Hsin Holdings Ltd.

    While Ju Teng said it's one of the world's largest makers of plastic computer casings, it's increasingly focusing on metals and plastic composites casings.

    In its last financial report, covering the first half of 2013, it said its metal casings business grew to 25 percent of revenue. Metal and composites cases had higher profit margins, it said.

    "The management believes that there will be more brands adopting composite materials for slim casing," Ju Teng said. "The Group will spare no effort in promoting its metal and composite material casing technology with a view to enhancing product margin with optimized product mix."

    The China Everbright report said it expected the company's core plastics laptop casing business to "remain sluggish" in the next few years.

    About 90 percent of Ju Teng's sales now come from laptop casings, but the Everbright report said tablets and smartphones could grow quickly and each account for 10 percent of Ju Teng revenue in 2014.

    Ju Teng employs 38,000 people in factories in Taiwan and China, and had revenues of HK$4.29 billion (US$552.5 million) in the first half of 2013.

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