Rainbow Trust Industrial Co., Ltd.

Teflon hose

Rainbow Trust Industrial Co., Ltd. specializes in hose assemblies for the automotive, motorcycle, and home-appliance segments. The company is a fully integrated manufacturer and offers one of the widest varieties of hose types, fitting designs, and tube shapes to meet the different requirements of customers worldwide.

The TS 16949-and ISO 14001-approved firm is already the world's largest producer of stainless-steel braided Teleflex 1/8-inch Teflon hose utilizing Dupont's T62 polytetrafluoroethylene (PTFE) resin, and a major automotive/motorcycle pipe/hose manufacturer in Taiwan. Despite its success, the supplier is fully ready to go global to become an international player after dominating almost the entire domestic market for motorcycle brake-hoses.

Because Taiwan has become one of the world's most important production bases of ATVs, which use much-longer brake hoses due to having four-wheel disc brakes, Rainbow Trust set a record of shipping 600,000 meters of Teflon hoses in 2006, supplying almost all ATVs made on the island, compared with only 12,000 meters delivered in 2001.

Teflon brake hose features several outstanding advantages, including resistance against all chemicals, acids and caustic solutions (except liquid alkali metals and fluoride compounds); working temperature range from -40 to +260; weather, ozone and UV resistance; oxidation resistance; diffusion resistance; ultra low expansion volume flexibility; and high dielectric strength.

Rainbow Trust's development strategy is firmly focused; always be a pioneer with foresight, precision insight, and fast response. Simply put, this is why Rainbow Trust has never fallen behind any rival in Taiwan since its establishment in 1984.

The company supplies mainly four product categories, including brake hose assemblies for hydraulic disk-brake systems on motorcycles, scooters, all terrain vehicle (ATVs), utility vehicles (UTVs or side-by-side), and other vehicles; air conditioning hose assemblies for cars and home appliances such as refrigerators and other air conditioning systems; power-steering hoses and oil-cooler hose assemblies; and various kinds of high-precision hose fittings.

Currently, the firm runs two plants in northern Taiwan with a total of about 120 employees. Some achievements have been realized thanks to Rainbow Trust's foresight and dedication. For example, it was the first local company to introduce the production techniques for hoses carrying the R134A refrigerant in 1991 with help from its Japanese technical partner NICHIRIN Co., Ltd.; and the first authorized overseas producer of Teleflex's 1/8-inch Teflon brake hoses, of which all the stainless-steel braiding is done by Rainbow Trust. The goal for the firm is to develop an alternative brake hose with similar performance characteristics as Teflon but much more cost-competitive, or priced closer to rubber-hose products.

Shih began producing motorcycles and four-stroke engines over 40 years ago (when he was only 18 years old) by utilizing used machinery equipment left by U.S. military after World War II, when Taiwan had no significant transportation vehicle industry, successfully producing the first batch of motorcycles for Taiwan's postal offices. In addition, he also designed and produced engines for agricultural machines when farming was just emerging in Taiwan.

"I am so proud that all our customers regard us highly for offering strong R&D capability, best-quality product, more importantly, the dedication to always pursue the first and best," Shih claims humbly. "Either qualitatively or in terms of speed to develop new products, we are the best or the fastest."

Thanks to Rainbow Trust's pursuit of the best, the company is the most-frequent winner of supplier awards granted by major customers such as Matsushita Taiwan, Kwang Yang Motor Co., Ltd. (KYMCO), Sanyang Industry Co., Ltd. (SYM), Yamaha Taiwan, Denso Taiwan Corp., etc.

"Rainbow Trust has insisted on three corporate goals since our establishment and we will never depart from that because such practice has proven effective for prosperous and sustainable operation, enabling us to offer outstanding quality, generate reasonable profits, and invest in further development," Shih points out.

A slogan that Shih frequently repeats is "without quality, you have nothing," the seemingly terse mantra is actually the essence to Rainbow Trust's gradual growth from the early years as a young, small company with strong technical capability to one of the most famous auto- and motorcycle-parts manufacturers in Taiwan.

The chairman keeps one eye on the past as he focuses on making improvements for the future, setting up and refining internal management systems, cultivating talented professionals, enhancing and renewing R&D equipment, collecting the latest industry information, introducing new techniques and materials, and constantly upgrading production processes to cut cost, keeping the company in the lead.

Looking Ahead Pays Off

Thanks to Shih's insistence on concentrating on Rainbow Trust's core business, the firm's unmatched quality and development capabilities, and the chairman's acute insight towards market trends, Rainbow Trust pulled ahead all local counterparts to tie up with NICHIRIN of Japan, a major hose assembly suppliers for automotive, motorcycle, and other vehicles, as early as 1991 to introduce advanced production techniques for R134A refrigerant hoses and pipes, triggering a big impact in the local hose industry by importing such techniques, such as the non-welding pipe-production method, which is still the most advanced in Taiwan.

Eyeing the potential prospects in the development of Taiwan's motorcycle industry, Shih also pushed the partnership between Rainbow Trust and NICHIRIN to introduce advanced technique to produce high-pressure, low-inflation rubber brake hoses to the island, making Rainbow Trust a key driver to greatly upgrade the quality and technical level in Taiwan-made motorcycles and scooters.

With Rainbow Trust's technical advancement, all of Taiwan-made motorcycles, whose displacements have been increasing, began to be equipped with better quality disc brake systems, paving a smoother and wider road for exporting high-quality and safety-engineered motorcycles from Taiwan to major industrially advanced markets worldwide.

The successful and strategic partnership with NICHIRIN, in fact, not only set a milestone for the firm but also created another important business opportunity for the ambitious supplier. Rainbow Trust recognized very early that the rubber brake hose would no longer meet the demanding requirements for rear brake systems on motorcycles due to its relatively higher pressure, which compromises the braking force due to the long distance between front brake levers and rear brakes.

In 2000, Rainbow Trust signed a vital agreement with Teleflex Fluid Systems of the U.K., a subsidiary of the Teleflex Inc., to become the exclusive agent in Asia for Teleflex's Teflon brake hose utilizing Dupont's T62 PTFE resin. Teleflex Fluid Systems is a global manufacturer of PTFE hoses and accessories. Teleflex uses pure PTFE powder to manufacture the very best braided hose products in the world.

Teleflex Inc. is a diversified industrial company that is committed to creativity and innovation. For more than 60 years, the big company has grown by providing engineered products that help customers meet their business requirements. Today, the firm has annual revenues of US$2.5 billion, operations in 24 countries, and more than 20,000 employees.

The extra-low inflation Teflon brake hose opened a gate for Rainbow Trust's rapid and sizable growth in the next few years, paving the way for a very bright future, sustainable operation and long-term business advancement.

Rainbow Trust's eye-catching sales performance, of which the Teleflex's 1/8-inch Teflon brake tube sales sharply grew from 12,000 meters in 2001 to 600,000 meters in 2006 (or accounting for 95% of Teleflex's sales of such product), greatly impressed the U.K.-based hose supplier and won Rainbow Trust the chance to carry out local production of stainless steel braiding with inner tube supplied from Teleflex.

In 2004, Teleflex signed a technical-transfer agreement with Rainbow Trust to allow the Taiwan company to fully produce the stainless-steel braided sleeves for all its 1/8-inch Teflon hose. Rainbow Trust immediately poured about US$10 million into setting up a brand-new production plant and procuring all related manufacturing equipment imported from Italy.

In 2006, Rainbow Trust received production authorization and quality certification for Teflon brake hose from Teleflex, and inaugurated the new facility in mid-2006 to begin producing the product for Teleflex, with about 95% of the product being sold by Rainbow Trust.

Currently, Rainbow Trust operates a comprehensive Teflon hose production line with bobbin winders, 12 braiding machines, three high-pressure leakage test machines, ultrasonic cleaning machine, etc.

The next step, according to Shih, is for Rainbow Trust to persuade Teleflex in three years to authorize his company to fully produce locally Teleflex's Teflon hose products in Taiwan, including the inner-tube extrusions.

Another core competitiveness, or advantageous feature of the company is its leading R&D capability, which has been pushing Rainbow Trust to the forefront in the sector.

Always eager to achieve the best, Rainbow Trust was the first Taiwan owner of the aerospace-grade 3D, five-axle laser inspection gauge, with which the company's prototyping speed can be greatly improved by 90%. For better production results and higher quality, the firm self-designs and -manufactures most of its dedicated production equipment, except for standard machines.

Shih proudly claims that even some specialized hose manufacturers or hose-production equipment suppliers are highly impressed by Rainbow Trust's strong R&D capability and asks the firm to help develop specific-use machinery for higher production efficiency.

In addition to many outstanding machinery designs, Shih points out; one of the best examples is the self-developed, comprehensive ultrasonic cleaning production line for its Teflon hose products. In the past, according to the chairman, some Teflon brake hoses might show staining after a period of use because they are exposed to high-temperature sections of a vehicle (such as the scooter engine) and the oil left in the bobbin winding process will seep through, without affecting the hose's safety or performance. Upon discovering the problem, Rainbow Trust self-developed the ultrasonic cleaning line, which exceeds even Teleflex's original equipment and totally rids of the pesky problem, while the cost is only about one-tenth of imported counterpart.

"We have better production processes, equipment, and management," Shih claims, "which prompted Teleflex to choose us as its best partner for the Teflon brake hose products."

Beside the most advanced and top-end equipment, such as computer numeric control (CNC) pipe benders (for making automotive air-conditioning refrigerant hoses), comprehensive Teflon stainless-steel braiding lines, etc., one sees a unique scene at the Rainbow Trust plant-that every employee treats each other as family. "That's one of our core strengths; the company is a family, "Shih says. "With the family concept in every employee's mind, everyone will help each other and help the company pursue sustainable operation. At Rainbow Trust, we treat every employee as family (there are literally many relatives of different families employed) and care about everyone's health and safety. Even during dire times, we never lay off anyone because we know that each employee is family."

With solid R&D and manufacturing strength, as well as a big clientele, Rainbow Trust is actively developing new products that are expected to make big impacts on the global brake hose market, just as it has done all along.

According to Shih, his company has tied up with Dupont in joint development of a new material formula for producing brake hoses with better performance than counterparts made of rubber, with costs lower than Teflon hoses. The new product, the chairman says, is expected to be commercialized in two years, providing global customers a new option, one that is high-quality, reliable and lower priced, especially if the demand need not be top-end as provided by Teflon hoses.

Mapping out a plan to bring the new product to market, according to Shih, Rainbow Trust will use its old plant to produce the new product, which is expected to revolutionize the global brake-hose market in a short period and the demand volume will be "very, very big."

New Plant in Vietnam

Rainbow Trust is also actively aiming to go global, because the firm wants to carve out a bigger market niche worldwide with its high-quality, cost-competitive products.

Eyeing the Association of Southeast Asian Nations (ASEAN) regional market, in which about 80% to 85% of the world's motorcycles are sold, the Taiwan company is constructing a new facility in Vietnam and is scheduled to bring it online late 2007 or early 2008 to produce brake hoses.

According to Shih, more and more motorcycles sold in the ASEAN market are being equipped with disc brakes, with the current proportion at about 50%, Such figure will increase at a high speed in the coming few years as consumers now demand higher-quality vehicles with the Asian boom that has given them greater affluence.

The scheduled Vietnam plant will not only be a production base for Rainbow Trust's sales in ASEAN nations, Shih says, but also an export center of medium-level hoses globally. The Vietnam facility is expected to embody a well-established manufacturing division-of-labor plan for Rainbow Trust, he explains, with the company's new plant in Taiwan focusing on Teflon hoses and another local plant on the proposed hose of the Dupont material.

"Rainbow Trust never stops to pursue being the best and first," Shih claims proudly. "Already the world's top producer of 1/8-inch Teflon T62 brake hoses, we aim to be No. 1 in all our product categories."