Government to back up machine tool industry

The Ministry of Economic Affairs in Taiwan is offering assistance to small and medium-sized enterprises (SMEs) in the face of foreign-exchange hedging challenges, a domain many of these businesses are relatively inexperienced in.

Minister of Economic Affairs, Kung Ming-hsin, has been actively addressing the issues confronting local businesses. He plans to spend the remainder of the week engaging with industry and business associations, visiting companies, and consulting legislators.

During his meetings, Kung Ming-hsin has emphasised the importance of providing loan guarantees to SMEs and micro-enterprises. In the first eight months of this year, total loan guarantees rose by 5.85% to NT$1.13 trillion compared to the previous year. Last month alone, the fund provided NT$143.38 billion (US$4.67 billion) in loan guarantees to these businesses, albeit a decrease of 7.73% compared to July.

The assistance comes in the form of hedging tools and financing programs via the Small and Medium Enterprise Credit Guarantee Fund of Taiwan. If companies make regular interest payments, the guarantee fund would allow them to extend loans without reapplying.

However, specific details about how these loan guarantees are helping the machine tool and machinery industries, which are vital to local manufacturing, were not provided. Kung Ming-hsin did promise not to withdraw financial aid from these industries, which are currently facing challenges due to the US' 20% tariff on Taiwanese goods.

The Minister also met with representatives from the machine tool and machinery industries in Taichung, where he was informed about their concerns regarding exchange rate volatility. Manufacturers expressed a desire for short-term exchange rate stability to simplify price quotations, as the New Taiwan dollar is currently trading at about NT$30.5 to the US dollar, causing concern among manufacturers.

In response, Kung Ming-hsin urged the legislature to swiftly approve a special budget to expand overseas support for companies, referencing a NT$93 billion special budget under the Special Act for Strengthening Economic, Social and National Security Resilience in Response to International Circumstances. The government is also providing financing and potentially lower interest rates to support overseas expansion for companies.

Companies investing in innovation, such as replacing outdated equipment or upgrading research and development capacity, would receive government backing. Machine tool and machinery makers, including Hiwin Technologies Corp, Fair Friend Enterprise Co, Tongtai Machine & Tool Co, and others, attended a meeting with Kung Ming-hsin. The Minister reiterated the government's commitment to supporting these industries, as they are crucial for domestic manufacturing.

Despite the search results not providing specific information about which companies attended a meeting with Economic Minister Kung Ming-hsin on the date of the press release, it is clear that the government is taking significant steps to support Taiwan's SMEs in these challenging times.