Company doubling plant’s chip capacity

MANILA, Philippines — Cirtek Holdings Philippines Corporation (CHPC), which is aiming to launch its initial public offering next month, is targeting to more than double its manufacturing capacity at its Laguna manufacturing complex over the next three years.

According to Cirtek chief finance officer Anthony Albert Buyawe the expansion aims to increase the plant’s manufacturing capacity by 1 billion units of microchips per year from its current capacity of over 800 million units. CHPC targets to end the year with a capacity of around 1 billion units.

Buyawe said the third building at its current facility in Laguna, which will add 180,000 square feet of manufacturing space, will be able to deliver the additional capacity of 1 billion units per year.

Cirtek’s microchips are used in smart phones, table PCs, home entertainment systems, other consumer electronic products, industrial and office equipment, and automotive components.

“We plan to use part of the proceeds from our initial public offering to support our expansion plans,” Buyawe said. Cirtek expects to raise around P628 million from its IPO slated towards the end of November.

Proceeds from the IPO will be used to fund the construction of a third building estimated to cost P150 million and the acquisition of new equipment and machinery (P260 million) and improvement of existing facilities (P30 million) to increase production capacity.

The balance of the proceeds shall be used for general corporate purposes, including but not limited to, working capital and investments.

Buyawe remains optimistic that the company will be able to push through with its planned offering by end November as the company’s financial prospects continue to be positive.

“Our business model remains fundamentally sound throughout the years,” he said. CIrtek reported a net income of $1.7 million for the first half of 2011, an increase of 21 percent compared with $1.4 million for the same period in 2010.

In addition, CHPC has been consistently declaring cash dividends to its shareholders annually.