Taiwan's Packaging Machine Makers Take Aim at Costs

Local producers are riding their price advantage to the market forefront

Surging production costs due to factors such as rising oil prices worldwide have led customers of Taiwanese packaging equipment suppliers to demand more cost-efficient products.

What customers have wanted most has been shorter product delivery, less labor time, zero material waste, accurate one-shot cutting, slimmer packaging films and eco-friendly materials.

One result of these customer demands has been design innovations such as computerization, high speed and automation. Another result has been that Taiwan has become the fourth top maker of plastic-processing equipment worldwide, which includes packaging machines.

One Taiwanese company that has experienced the effects of customer demands has been Hanyamn Joung Industrial Co., Ltd., which makes both packaging equipment, mostly vacuum-forming machines, and plastic cases that become packages for the consumer electronics, tool, mask and food industries. According to company President Yang Dongmou, "these industries, consumer electronics in particular, demand both high quality packaging and high output efficiency."

While demonstrating a tray that the company manufactures for containing mobile phones, Yang pointed to the neat sinks on its surface formed by molds. "Phone makers must demand precision in their products because precise sinks allow more containing room on a tray and create a professional image," he said.

Among the company's customers are Foxconn and several LCD and mobile-phone makers in mainland China.

Computerization is the major reason for the processing accuracy of the company's equipment, typified by both its microcomputer continuous vacuum shaping and microcomputer fully automatic vacuum forming machines. The computers store both mold and vacuum temperature parameters that eliminate the need for skilled workers to manually switch molds and temperatures.

The company's machines, controlled by computers, can change molds in around 10 minutes, and computers allow an even heat spread all over the trays that results in an output free of defects. "It is common that equipment manufactured in mainland China has poor heat spread control, which often causes a high percentage of faulty trays," Yang said.

Although the major source of material waste is defective products, Yang said that this is not the case with the company Hann Rong. "Hann Rong has established a highly integrated manufacturing capability in its package operation that enables it to complete trays with its board-forming and pellet-melting equipment," he said. "Thanks to its pellet-melting capability, it recycles faulty products which are shipped free of defects."

Continuous Vacuum Forming Machine

Hann Rong's chain-style continuous vacuum forming machine is manufactured in four models depending on form size and power: The HR6012-A and HR7012-A are equipped with a 7 1/2 horse-power vacuum pump while the other two types are equipped with a 10-HP pump.

These machines are efficient both in terms of energy and output thanks to ceramic heaters, and DC motors ensure that they have strong pulling force, processing accuracy, steady material conveying, automatic height and mold depth adjustability. And it is easy to operate them due to the human-machine interface, which allows storage of up to 360 parameters to control temperature, time and number of forms.

Yang said that in contrast to the fully-automatic vacuum forming machines whose low-volume production of diversified products have an output of three to five bags per minute, the continuous vacuum forming machines have an output rate of 10 packages per minute, which makes them suitable for volume production of standard packages.

"Efficient machine designs have helped boost our package output to 50 tons a day, up from only 10 to 20 tons around five years ago," Yang said.

Approximately 30% of the company's revenues come from electronics manufacturers, up from zero when the company began making packages for electronics products in 2000. The remaining 70% of the company's revenues come from foods manufacturers.

Founded in 1979, Hann Rong diversified into package manufacturing in 1992 when it entered the mainland China market where it hoped to achieve higher revenues in equipment production. "Packages are related to the necessities of daily life, and the possibilities of daily consumption are immense," Yang said. Although currently the company operates three package-making businesses in Hebei, Shanxi and Jiangsu provinces, it has never considered making equipment in the mainland, Yang said, which reflects his apprehension that the company's machines could be copied by their mainland Chinese rivals.

In complying with the mainland's stricter environmental-production laws, Hann Rong's package-making operation has replaced PVC with PP and PET materials, which are recyclable and produce much less toxicity than PVC when burning.

Automating Production

S-Dai Industrial Co., Ltd. was founded in 1978 and has equipped most of its machines with numerically control-based computers that boost output efficiency and packaging accuracy.

S-Dai manufactures the following kinds of machines: auto high-speed sealing and cutting; thick bag automatic sealing and cutting; high-speed automatic trimming, side-sealing and cutting; sandwich bag folding; plastic file bag making; zipper bag side-sealing and cutting; clear-holder making; flower shape bag making; flower bag automatic stacking making; and perforation and slitting.

Computers make production control easy and reduce labor time, company General Manager C.L. Jiang said. Jiang said that S-Dai's plastic file bag making machine, which was recently added to the company's product line, is an example of this. "Our plastic file bag making machine now produces more than 200 bags per minute, which is a huge increase from 70 to 80 bags in the past," he said.

The machine is equipped with Japan-made AC servo motors that increase material feeding, a German-made photocell maintains positioning accuracy, and a European conveyor belt enhances durability. The machine's computerization also makes it intelligent: it stops automatically whenever a mistake in positioning occurs and it screams when the sealing temperature is wrong.

The company's other major product is its flower packaging machine series, which consists of the following kinds of machines: perforation and slitting; automatic bag stacking; and automatic bag shaping.

According to Jiang, flower suppliers which already have packaging factories near airports to provide quicker delivery time, have asked the company to develop machines that produce pre-formed bags stacked automatically in piles, which saves time in folding them.

The bag maker's positioning, sealing and cutting accuracy are ensured by a magnetic clutch and brake system, photocell sensors guarantee accurate printing, stepless motors allow changing conveying speed, and imported conveyor belts enhance durability. Due mostly to Taiwan's well developed electronics industry, S-Dai can undersell Japanese and German suppliers by 30 percent while rivaling them in quality, Jiang said. "Many Japanese and German stationery manufacturers and florists prefer our machines to those of local makers," he said. The company has increased its efforts to do business in the European market after acquiring the CE mark a few years ago.

Similar to many other packaging sectors, stationery and flower packagers have replaced PVC with PP as their packaging material, Jiang said.

The company's primary shipment destination in Asia has changed, which reflects the adjustment in labor costs in major markets. "Taiwanese packaging manufacturers are moving from mainland China to Vietnam in pursuit of lower production costs, just as they did when they migrated to the mainland from their homeland around 20 years ago," Jiang said. "Their relocations have caused us to change our export destinations."

This year S-Dai will participate in the trade shows ChinaPlas 2012, Plast 2012 Milan (Italy) and Interplast Thailand 2012 to drum up new business.

Quality Edge Over Mainland Competitors

Kun Fong Machinery Co., Ltd., which manufactures packaging equipment including interfold machines, log saws, auto wrapping machines and auto box sealing machines mainly for the tissue industry, has replaced a PLC (programmable logical controller) with a server in the automation part of the production process, company President Peter Chen said.

"The computing system works much better than PLC in terms of ensuring accurate positioning, temperature and motion controls," Chen said.

Accurate positioning and production speed have become increasingly important to tissue packaging providers since multiple-side packaging replaced one-side packaging on tissue packages and multiple tissue rolls or bungles packaging replaced single roll or bundle packaging. "This is one of the advantages that Taiwan's equipment suppliers have over their mainland Chinese competitors," Chen said.

Although equipment produced in mainland China still sells well in developing markets due to low pricing, "manufacturers with deep pockets are interested in Taiwan-made products thanks to their high quality," Chen said. According to Chen, since obtaining CE approval his company has been tapping into the markets in Latin America, Russia, Eastern Europe and the Middle East while also increasing its marketing efforts in the West. "These developing economies have become potential markets for Taiwan's products since an increasing number of manufacturers there are considering replacing machines made in the West with less expensive and higher quality ones," he said.

Based on his experience as an equipment supplier for over 25 years, Chen said that Western equipment manufacturers command the top part of the market, Taiwanese and South Korean manufacturers control the middle part while mainland Chinese manufacturers dominate the bottom part. "When beginning their operations, equipment buyers at the bottom usually use the mainland's machines," he said. "Then when they start making money, they often prefer Taiwan-made machines. And Taiwanese equipment manufacturers usually roll out the machines that their Western competitors introduced three or five years earlier."

Regionally Tailored Solutions

Benison & Co., Ltd. is Taiwan's leading supplier of heat shrinkable films and machines that serve food, electronics and chemicals operators. Company General Manager Benker Liao said packaging manufacturers still dependent on manually-operated machinery must struggle to be successful. Liao also said he thinks that computerization is not the only way for a manufacturer to achieve mechanization. "Some buyers specify computerized machines, while others usually prefer mechanically-controlled devices," he said.

Liao said that he offers mechanical or semi-automatic machines to buyers in remote areas far from maintenance and repair shops and computerized ones to buyers in urban areas where there is no short supply of support services. "Computerized machines require tech support, whereas mechanically-operated machines sometimes allow users to tinker with them," he said.

The company has recently introduced several easy-to-use automated machines, including an automatic tamper-evident sleeving machine, a super hi-speed label/tamper-evident sleeving machine, an automatic side-seal sealer, an automatic L-type series sealer, and heat shrinking tunnels.

The automatic tamper-evident sleeving machine comes in CP-50 and CH-100 models and can finish 100-120 products per minute. It is also suitable for PET, PVC and OPS plastics.

Primed for shrink-wrapping thin and small products, the L-type series sealers are fully automated in discharge and shrink adjustment. And the USA004B automatic side-seal sealer features a dual-track system that holds products in place for smooth operation.

Founded in 1962 by Liao's father to produce packaging materials including PT, OPS, PLA, PVC, PP and PE, Benison branched out into equipment manufacturing when the son took over the family business in 1986. "We could not raise sale volume without equipment sales," the junior Liao said.

Liao has enhanced added value through working with American and Japanese equipment manufacturers that worldwide have the most advanced technology for making packaging products and materials. The company is a contract supplier of machines in industrially advanced markets and offers branded products in developing ones like mainland China.

"Most European nations impose stringent safety standards on equipment, and our CE mark proves that our products are safe whether they have an electrical power, drive or cutting design," Liao said. "Our machines shut off automatically when they sense it is an unsafe operation." Around 10% of Benison's corporate sales comes from Europe and roughly the same comes from mainland China and the United States. Working with over 100 dealers in some 40 nations has made the company less susceptible to recession, Liao said.

Having operated in the Chinese mainland for 10 years, the company never competes with local manufacturers since it specializes in a niche market where machines require high production precision. In contrast, the local makers that dominate commodity markets require only acceptable precision. "Although there is undoubtedly a vast opportunity in the mainland, underselling is intense there," Liao said.

Benison offers made-to-order designs and has 10 engineers fluent in English who can show customers how to operate the company's latest machines, Liao said.

Although Liao believes the packaging equipment market will continue to grow, he said that newcomers will intensify the competition and urged manufacturers to have supply machines that are in demand.