Astro Tech Still Far From Full Capacity

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HO CHI MINH/ KIM HUY (VN) – Frame manufacturer Astro Tech was the second factory visited as part of the NieuwsFiets.nu DealerReis 2024. Co-founder Samuel Hu said that the international bicycle industry has not yet returned to normal.

Samuel Hu looked back on the history of his company, which has been producing bicycle frames for over 30 years and has a leading position as a supplier of aluminum and carbon frames, with innovative designs and process technology. They started with a team of seven people and now have more than 3,000 employees. The manufacturer switched to mass production of e-bike frames in 2005. That year also saw the start of the cooperation with Gazelle. Astro Tech has grown into a development center of full suspension bicycles and e-bikes, striving to integrate electronic, battery and mechanical systems to provide complete frame solutions for e-bikes.

Partly for this reason, Darfon Electronics Corp. acquired a majority stake in Astro Tech in 2021. The strategic partnership involved an investment of 1.22 billion Taiwan dollars (approx. €36 million), which provided 51% of the company's equity. This strategic alliance has brought Darfon and Astro Tech synergies in terms of technology, process and management to jointly create win-win situations.

Astro Tech serves a broad international customer base

Astro's current customer base includes high-end mainstream brands in North America and Europe, including the PON brands Gazelle (since 2005), Urban Arrow, Kalkhoff and Cannondale and the Accel Group brands Haibike, Ghost, Winora and Lapierre. Bicycle manufacturers such as Canyon, Orbea, Trek, Hartje, KTM and Riese & Müller are also regular customers of Astro Tech. According to Samuel Hu, it is no coincidence that Astro Tech produces for both PON and Accell, but in the Netherlands for example for Gazelle and not for Batavus or Sparta. "That is a deliberate policy, because those brands are each other's direct competitors. If we produce for Gazelle, it is not chic to do the same for Batavus or Sparta, but we do other brands of Accell Group," Hu explains. "We do that not only in the Netherlands, but in other markets."

Astro Tech’s main production locations are in Taiwan (Taichung) and Vietnam, where they have two factories and from there they quickly bring bicycle frames to the market. In 2000, Astro Tech started frame production in Vietnam in Dong An, followed nine years later by a second factory in Kim Huy, which will be visited during this dealer trip. It is their largest factory, which is partly automated and where a lot of product testing is done for quality control. The factory visited in Kim Huy has a capacity of 250,000 aluminum frames per year and 50,000 carbon frames.

Despite its broad customer base of leading brands, Astro Tech is far from overcoming the corona dip. “The market is still very sluggish. We have been operating at 30% of our capacity for more than a year now. That is far too little,” says Hu in all honesty. “Fortunately, we are a healthy company and can absorb that, but of course I am concerned. In the meantime, we are using the time to continue developing our company and to be ready for when manufacturers start calling on us more. That will certainly happen, but it will take longer than expected.”

The further development that Hu refers to includes further automation of the production process. During the tour, it was not only clear that part of the production was not in operation, but also that there were already several welding robots, which had recently been delivered and will soon be placed and installed. “This will allow us to take the consistent quality of our frames to an even higher level,” says Hu. Another development is that Astro Tech has purchased low-carbon aluminum rods with a view to sustainability and CO2 reduction. The first batch of 500 tons will be delivered in the spring of 2024. The CO2 emissions of each frame produced can be reduced by a factor of six.

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