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CHC Healthcare Group has launched its irradiation business, an investment of NT$1 billion, which has begun to contribute modestly to revenues this month with initial food sterilization orders. The company is targeting higher-value sectors such as medical materials and industrial products, which are currently in the testing and certification phase. Contributions from these sectors are expected to gradually start in Q4, with significant scaling up anticipated by Q2 next year. Currently, the irradiation power is set at 40 kW, which can be increased 4-5 times based on demand, potentially reaching a maximum output value of NT$1.4 billion. The company is also considering establishing facilities in China or Southeast Asia, with invitations already received and under evaluation.
CHC Healthcare Group planned its entry into the sterilization industry in 2019. In 2021, it began construction of a sterilization plant in the Tongluo Science Park, equipped with photon irradiation and electron irradiation systems manufactured by Belgium's IBA. The facility is now complete. Irradiation primarily includes E-beam vertical beams for low-density products such as semiconductor wafers and industrial products, and photon irradiation X-rays with stronger penetration for medical devices. Testing and certification are currently underway for medical devices and electronic products, which must pass rigorous certification processes. Contributions to revenue this year are expected to be minimal.
General Manager Li Minglun stated that their subsidiary, Xinhe Biotech, offers the first and only high-energy irradiation service in Taiwan, certified by the Atomic Energy Council. This service features precise energy, energy savings, rapid processing, and stable supply. It can be used for microbial elimination in medical equipment to ensure sterility and prevent infection, food sterilization to extend shelf life, polymer crosslinking, material modification, enhancing composite materials, improving semiconductor switching efficiency, aerospace material testing, and gemstone color enhancement.
Currently, widely used ethylene oxide (EO) sterilization in Taiwan is highly flammable, explosive, and has been proven to be a toxic carcinogen. Various countries have imposed regulations on EO. In food processing, EO residue issues can lead to entire batches being discarded. Japan, South Korea, and China have long developed irradiation sterilization, often using IBA systems.
Li mentioned that Xinhe has begun receiving small orders primarily for food sterilization, contributing slightly to revenues starting this June. However, the company is focusing on higher economic value applications such as medical, industrial products, electronics, and composite materials irradiation. They are reserving some capacity and manpower for testing and certification, aiming for more substantial contributions starting in Q4, with a significant scale-up expected by Q2 next year, leading to positive profit contributions.
Regarding the pricing model for irradiation services, Li explained that it is calculated based on the amount of radiation, volume, and time, with charges per second. Currently operating at 40 kW, the power can be increased to a maximum of 190 kW based on demand, effectively amplifying capacity 4-5 times. Operating on a three-shift system with a maximum irradiation volume of 60,000 cubic meters, the highest potential output value exceeds NT$1.4 billion, based on market prices of NT$5,000 per cubic meter.
Irradiation services require specialized personnel and technical "know-how" for machine calibration. Li emphasized that CHC Healthcare Group, already engaged in the radiation field, has assembled a robust team at Xinhe, including industry veterans with over 20 years of experience in sterilization and hospital radiation machine operations. Beyond the Taiwanese market, they are evaluating overseas expansion, with plans under consideration for setting up facilities in Southeast Asia and China, following invitations from companies in these regions
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