Taiwan New Kinpo Group expanding printer capacity in China despite trade row

15, Jan. 2020

New Kinpo Group plans to manufacture products for major Chinese smartphone brand Huawei at a 799,999 square-meter production complex, which is scheduled to be completed this year. (NNA)
New Kinpo Group plans to manufacture products for major Chinese smartphone brand Huawei at a 799,999 square-meter production complex, which is scheduled to be completed this year. (NNA)

TAIPEI, NNA – Taiwanese electronics manufacturer New Kinpo Group will double printer output in China with an additional 13 million units per year even while many Taiwanese enterprises turn to Southeast Asia as the U.S.-China trade war drags on.

The group has invested 10 billion yuan ($1.45 billion) in a 437,335 new square-meter complex in Yueyang city in Hunan province to manufacture HP Inc.’s inkjet printers partly because it could qualify for a tariff exemption or reduction. The plant was officially unveiled on Jan. 3 and is expected to reach full operation in the end of 2020, with a planned staff up to 15,000 people, company officials said.

“We are still growing, and Yueyang is one among our many planned expansions, including those in Southeast Asia,” Chairman Rock Hsu told reporters before a factory unveiling ceremony in Hunan.

New Kinpo Group Chairman Rock Hsu speaks at the unveiling ceremony of a new printer factory in Yueyang city, Hunan province, China, on Jan. 3. (Photo courtesy of New Kinpo Group)
New Kinpo Group Chairman Rock Hsu speaks at the unveiling ceremony of a new printer factory in Yueyang city, Hunan province, China, on Jan. 3. (Photo courtesy of New Kinpo Group)

Exports from China to Southeast Asian countries are eligible for tariff reduction or exemption under the pan-Asian Regional Comprehensive Economic Partnership agreement trade liberalization deal —another reason to stay in China, Hsu said.

The partnership involving mainly China and the 10-member Association of Southeast Asian Nations (ASEAN) proposes to “eliminate tariff and non-tariff barrier on substantially all trade in goods in order to establish a free trade area among the parties.” Leaders from China and ASEAN made progress in November toward signing the deal.

About 90 million printers ship around the world every year, per New Kinpo Group data. The market has the potential to grow 2.4 percent this year and expand by another $6.91 billion through 2024, research and advisory company Technavio forecasts.

New Kinpo Group is also building a separate 799,999-square-meter complex in Hunan province with the domestic smartphone brand Huawei. The site is expected to be finished by the end of 2020 with shipments to begin next year, the company officials said.

In its initial phase, the factory for Huawei primarily fill orders for 4G base station-related devices and do 5G gear as the supply chain takes shape along with updated technologies, they said.

The Yueyang plant also marks a migration away from two original costal bases to spots further inland, where costs are cheaper. “We will continue manufacturing and assembling products, but will not expand scale there,” Hsu said, referring to the coastal sites. Yueyang will become the new China headquarters, a hub also for research and development work such as robotics, he said.

Hunan attracted the investor because of talent available among its 70 million people, transportation conveniences and provincial government support, he said.

Many Taiwanese companies, especially in manufacturing, have been locating bases in Southeast Asia to avoid any fallout from the U.S.-China trade row.

The number of overall investment projects in Southeast Asia from Taiwan during the first 11 months of last year hit a record high at 234, totaling $2.3 billion. Most of that capital reached Vietnam, Singapore, and Thailand in sectors such as electronic parts, data from Taiwan’s Ministry of Economic Affairs show.

New Kinpo Group will continue to expand in Southeast Asia, where it has been operating for decades, to meet demand from clients hoping to avoid tariffs imposed by the United States on exports from China, the 76-year-old founding chairman said.

The trade dispute that broke out between the world’s two largest economies in March 2018 has led to U.S. tariffs on $550 billion worth of exports from China shipped to the United States.

New Kinpo Group’s Thailand capacity is expected to double this year from its 2018 levels while its Philippines capacity goes up 20 percent, according to the company officials.

Workers assemble printers at New Kinpo Group’s plant in Yueyang City, Hunan Province, China, on Jan. 3. (NNA)
Workers assemble printers at New Kinpo Group’s plant in Yueyang City, Hunan Province, China, on Jan. 3. (NNA)