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Merida Invests in New Paint Facility

Published December 6, 2010

TAICHUNG, Taiwan (BRAIN)—Merida plans to add 200 employees at its Taiwan factory next year after it opens a multi-million-dollar paint and decal facility and adds an overnight shift to its assembly line. (Click on story title then PDF link next to title to view Taichung Bike Week PDF newsletter Day 2).

The new three-level paint building, under construction at Merida’s Changhua County compound, is scheduled to open in March, said Michael Tseng, Merida’s president.

“The painting capacity is not enough. Today the customer requires a high level quality paint, and today, there’s a shortage,” Tseng said at an interview yesterday at the Taiwan factory.

Merida, the island nation’s No. 2 bike manufacturer behind Giant, produces aluminum frames in Taiwan primarily for Merida and Specialized. Carbon fiber frames are imported from its factory in China, then painted, decaled and assembled in Taiwan.

During the busiest times—typically the third and fourth quarters—employees weld up to 750 frames a day for those brands. Between three main assembly lines and two shorter lines designated for smaller runs, 300 employees piece together 3,000 bikes every day. That’s a bike every 30 seconds.

Only a portion of those frames are currently painted on site, with the rest outsourced to subcontractors. Tseng said the new paint factory would enable Merida to scale back its use of contractors.

The new space for painting, coupled with the addition of an overnight shift on the assembly lines, will boost factory capacity by 30 percent, Tseng said. Tseng expects to find most of the new workers for the assembly line and paint facility from a population base of about 120,000 that is located within a 15-minute drive from the factory.

Taiwanese prefer to work close to home, he said, adding that the bicycle business doesn’t face much competition for labor from Taiwan’s other manufacturing industries because of its stability.

“Workers know that with bicycles they’re always busy. In other industries, sometimes it’s good and sometimes it’s bad,” he said.

Currently, Merida employs about 900 in Changhua, including 160 Thai workers who live in on-site apartments.

Sales for Merida’s Taiwan operations rose 8 percent in the third quarter. Tseng said he couldn’t comment on the company’s expectations for the year. He said the Merida brand is growing in Korea and Indonesia, where the company recently signed new distributors.

Sales are stable in traditionally strong markets like Germany, Australia, Spain, Russia and Norway, Tseng said.

Click on story title then PDF link next to title to view Taichung Bike Week PDF newsletter Day 2.

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