TAIPEI (CNA) – Taiwan-based Ta Chen Stainless Pipe Co., the largest stainless steel distributor in the United States, has decided to join forces with its affiliate to invest US$1 billion in the U.S. market, eyeing the rising demand for aluminum products there.
Ta Chen Stainless will work with affiliate Brighton-Best International (Taiwan) Inc. and pour funds to produce aluminum coils and plates in the U.S. market, in response to President Donald Trump’s “America First” policy, which includes attracting investments and creating more jobs in the U.S.
The investment plan came after Ta Chen acquired an aluminum company in the U.S. last year to roll out aluminum products by itself and even import products from the world into the U.S. market.
According to Ta Chen, supply in aluminum coils and plates in the U.S. market has become tight after Washington limited China’s imports in late 2017, accusing Chinese firms of selling their products at unfairly low prices there.
But demand in the U.S. remains solid, so aluminum coil and plate prices have been on the rise, which prompted Ta Chen Stainless and Brighton-Best to study the possibility of producing the products there.
Under the investment plan, Ta Chen Stainless will invest US$510 million and Brighton-Best will invest the remaining US$490 million. The plan is subject to a review by Taiwan’s Investment Commission.
Ta Chen Stainless said the two partners are considering options to set up their own aluminum plant or acquire a U.S. production site for the new investment.
On March 8, Trump signed an order under Section 232 of the Trade Expansion Act of 1962 to impose additional tariffs on imported steel and aluminum by 25 percent and 10 percent, respectively. Ta Chen is one of the Taiwanese companies that could be negatively affected by the tariffs.
While Taiwan is seeking an exemption from the tariffs, market analysts said, Ta Chen Stainless’ move is expected to reduce the negative impact for the company, because products made in the U.S. will not be subject to tariffs.
Ta Chen Stainless said under Trump’s America First policy, the company has to have operations registered in the U.S. market first in order to have a chance to become profitable there.
According to a filing to the Taiwan Stock Exchange, Ta Chen Stainless posted NT$1.33 billion (US$44.63 million) in net profit in the first quarter of this year, up 475.35 percent from a year earlier with earnings per share (EPS) at NT$1.38, compared with NT$0.27 seen over the same period of last year.
