Company: FSTWF
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-044386
Chunk: 68

Company: FST Corp.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 4
Chunk 68
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5. The corporate headquarters primarily contain administrative, factory plant, and warehouse functions.

In 2023, Femco purchased land
and buildings located in Minxiong Township of Chiayi County, Taiwan to serve as the site of its future factory expansion. Femco purchased
two land parcels including No. 22 and 22-2 of the Industrial Subsection of Touqiao Section and six construction projects including No.
11 and 11-1-11-5 were acquired, with a total of 3,045.87 square meters (10,069 square meters) acquired, and the transaction price
was NT$296,000,000. To finance the NT$296,000,000 purchase price, Femco utilized a combination of long-term funds (amount not specified)
and a secured bank loan of NT$224,000,000 (approximately 76% of the total cost) from the Bank of Taiwan. The loan has a 15-year term
with an interest rate of 1.78% for the first two years and 1.82% thereafter. The real estate sales contract was signed on July 11,
2023, marking the official start of the activity. Completion occurred on September 20, 2023, with the finalization of property and
mortgage rights registration under Femco’s ownership. The primary drivers behind this acquisition stem from Femco’s significant
production capacity growth in recent years, exemplified by a 67.98% increase in average monthly production capacity in 2022 compared to
2018. This expansion necessitated additional space for production lines, personnel, quality control, packaging, warehousing, and office
functions. Previously leased office space and production facilities were no longer sufficient to accommodate these growing needs. The
acquisition offers several key benefits. First, by eliminating rental costs (saving NT$5,400,000 annually), Femco achieved significant
cost savings. Second, consolidating operations like quality control and packaging on-site fosters improved operational efficiency.
Third, the new site allows Femco to showcase its entire production process and finished products to customers, enhancing brand image.
Finally, the additional land provides a platform for future factory development, with the potential to increase production capacity from
900,000 to 1.5 million shafts per month through optimized production line configuration and automation. Femco has currently commenced
utilization of the site as a warehouse for goods and as an office for certain administrative staff. Femco plans to further relocate