TECO Announces Acquisition of Shenchang Electric Co. , accelerating Entry into the Global Transformer Market

2024/09/24

 TECO Electric & Machinery Co., Ltd. (1504) announced today that its board of directors has passed a resolution to acquire Shenchang Electric Co., Ltd., a manufacturer of transformers, for a total consideration not exceeding NT$550 million. This acquisition, also includes to formalize a strategic alliance with Shenchang 's overseas affiliate, the Indonesian company PT. Sintra Sinarindo Elektrik. TECO’s Chairman, Morris Li, emphasized that Shenchang is renowned for its high-efficiency, energy-saving transformer technology and possesses the competitive strength to excel in global markets. This acquisition demonstrates TECO's initial step into the global transformer market, completing the gap in TECO’s electrification product portfolio. It also marks a significant milestone in TECO's journey toward achieving an “Industrial Electrification Integrator” and global net-zero sustainability efforts.


Shenchang, founded in 1971, primarily produces distribution transformers and has been active in the Indonesian market since 1996. Over the years, Shenchang and the Indonesian company SINTRA have become trustworthyd transformer suppliers for global leading companies such as Taiwan Power Company, PT. PLN (Persero), Formosa Plastics Group, and Siemens, earning a solid reputation for delivering high-quality products. TECO plans to acquire approximately 57.2% of Shenchang 's shares to become the majority shareholder. Looking ahead, TECO plans to assist Shenchang in expanding its manufacturing facilities in Taiwan. By leveraging its strategic alliance with the Indonesian company SINTRA and TECO’s global expansion strategy, the new proposed partnership will swiftly penetrate into the North American and Taiwanese markets, and expanding its product portfolio to 69kV to 161kV power transformer in the near future. The acquisition is expected to contribute to TECO Group's revenue starting in the fourth quarter of 2024.

Vicky Hsiao, Chairman of Shenchang, expressed optimism about the strategic collaboration with TECO and highlighted the unprecedented growth opportunities in the global transformer market. In the past, Shenchang and SINTRA have focused on local markets due to resource limitations. Through the partnership with TECO enables rapid expansion of production capacity, bolstering Shenchang’s participation in Taipower’s Grid Resilience Strengthening Construction Plan. Additionally, SINTRA will jointly support TECO’s global transformer business and electrification integration solutions, with a particular focus on meeting the demands of TECO-Westinghouse in North America. TECO and SINTRA also plan to expand electromechanical business opportunities in Indonesia. Meanwhile, Shenchang and SINTRA are positioning themselves to transition from regional markets to the international market, supported by TECO Group's global platform and resources. Both companies are optimistic about this transition and express strong confidence in their future growth.

Amidst the growing global emphasis on climate change and the rising demand for data centers, the United States is aggressively driving significant infrastructure upgrades, and the world signaling a transition to grid systems. The partnership between TECO and Shenchang positions them to provide green solutions that meet consumers’ needs. The initial focus will be on meeting the enormous demand for distribution transformers in North America, Taiwan (particularly within the industrial sector), new energy projects, data centers, and Taipower’s Grid Resilience Strengthening Construction Plan. TECO’s Chairman, Morris Li, highlighted that leveraging the high technical capabilities of Shenchang and SINTRA in distribution and power transformers, combined with the cost advantages of Taiwan and Southeast Asia, will enable the formation of an efficient, short-lead-time supply chain. Coupled with TECO’s comprehensive global sales network, this partnership aims to capture significant opportunities in the global transformer market. Morris Li further emphasized that this acquisition aligns with TECO’s newly outlined three-year strategic plan, reinforcing the focus on enhancing development in key overseas markets and demonstrating the high execution ability of the new board of directors.