Compal Electronics Inc. (??), one of the major contract electronics makers in Taiwan, said Friday that it has signed an agreement with Turkey-based Vestel to sell its TV assembly plant in Poland to the Turkish buyer.
Compal said that the transaction is expected to be completed by the end of this year after securing regulatory approval.
While Compal, which specializes in contract PC manufacturing, declined to disclose any financial details about the deal, some sources close to the company said that the selling price of the TV plant, located in Wroclaw of Poland, will help the Taiwanese firm post a small profit.
Compal said that the LCD TV market in Europe has been slow and its TV operations in the European market only account for 10 percent of the company's total TV shipments.
Since there have been no signs that the business scale of its TV operations in Europe will expand any time soon, Compal decided to dispose of the assets in Poland to restructure its business in the European market.
Compal said that the disposal of the TV plant in Poland is expected to help the company shed production costs.
After the asset disposal, Vestel will replace Compal to roll out TVs for Japan's brand Toshiba, the Taiwanese firm said. But, Compal added that it will continue to work with Toshiba in the TV business for the U.S. market.
Despite the disposal of the Poland TV assets, Compal said that it will seek cooperation with the major European brands, distributors and manufacturers to further penetrate the European TV market.
Currently, Asia is the major market for Compal's TVs with Japan accounting for more than 50 percent of the company's total TV shipments and the United States making up about 40 percent, according to Compal.
Looking ahead, Compal said, the company is determined to strengthen its TV operations by linking the business to the booming Internet of Things, while coming up with more smart TV designs to broaden its product portfolio.
Compal said that these efforts are expected to roll out value-added TV products for its customers and boost the overall bottom line eventually.
Outperforming the broader equity market in reflection of the TV asset disposal, shares of Compal rose 1.06 percent to close at NT$19.00 (US$0.60) with 14.42 million shares changing hands on the Taiwan Stock Exchange, where the weighted index ended down 0.15 percent at 8,987.55 points.
Source: Focus Taiwan News Channel