Hon Hai Launches Seven Expansion Projects
In anticipation of a bullish market, the board of directors of Hon Hai Precision Industry Co., Ltd. has recently approved a proposal to launch seven major expansion plans overseas, mostly in mainland China, at a toal investment of around US$366 million.
The expansions will be mostly conducted at the company's manufacturing facilities for products related to smartphones, tablet PCs and routers. Of the seven projects, six are planned for the company's six factories in Zhengzhou, Chengdu, Huaian, Hangzhou and Shenzhen. The only one outside the Greater China Area is for its factory in the Cayman Islands.
Hon Hai's two factories in Zhengzhou will add capacity at an expenditure of US$116 million to deal with more production of iPhone. Industry executives estimated expansions at the two factories will be completed in August 2011, with their com combined annual production capacity to reach 200,000 iPhones.
The company's Chengdu factory is carrying out a second-phase expansion to install 52 more iPad production lines, bringing total output to 40 million systems a year.
For these expansion plans, Hon Hai will issue unsecured corporate bonds at home to raise around NT$12 billion (US$400 million at US$1:NT$30).
