Taiwan Producers Forge Ahead in Uncertain Times
2009/01/19 | By Ben ShenManufacturers of parts and accessories for the base metal industry in Taiwan have benefited from strong support from the domestic iron and steel industry, giving them easy access to high-grade materials needed for high-precision parts. The industry has grown over the decades to supply parts for a wide range of demanding applications in the electronics, electrical engineering, computer peripheral, electrical appliance, and machined hardware sectors.
Local parts manufacturers are constantly upgrading and some have been retooling production lines to serve the high-tech communications, personal computer, and consumer electronics industries. Their investment willingness has been somewhat dampened, however, by the recent fluctuations in global material prices.
The sharp changes in iron and steel prices over the past year have been especially disruptive. Although the metal prices have come down, manufacturers are still hesitant to invest.
Although profits have plunged in the industry, those manufacturers with lots of cash on hand are confident they can weather the storm. Rather than shutting down plants, they are looking at ways to upgrade their manufacturing skill to enhance their international competitiveness so they can roar back when the world economy recovers.
An industry insider predicts that demand for industrial products will come back as inventories pare down.
Die-cast Parts
Lian Chang Casting Inc. was established in 1984 and is now one of Taiwan's top manufacturers of aluminum, brass, and zinc alloy die-castings. The ISO9001:2000 certified producer also specializes in tool design.
An integrated in-house production system, which includes CNC (computerized numerically controlled) machining, painting, electroplating, and assembly processes, is used to assure high quality. The company's R&D designs original products, but the company welcomes OEM and ODM (original equipment/design manufacturer) orders as well.
These efforts and facilities have helped Lian Chang to steadily increase domestic and export sales (mainly to North America and Western Europe). Its annual revenues are now in the range of US$2.5-3.5 million.
Despite a double-digit growth in sales, Lian Chang's business was flat in the first half of the year because of fluctuations in raw material prices. Beginning from the second half of this year, the company has felt a slowdown in global demand for industrial products, which will surely affect its performance for the year.
Industrial Valves
Jun Enterprises Corporation, founded in June 1997, is one of Taiwan's leading manufacturers and exporters of industrial valves, pipe fittings, OEM (original equipment manufacturer) products used for the oil, gas, water and chemical industries. The company offers one-stop shopping services to customers worldwide.
At present, the company's major product lines are gate, globe, check ball and other types of valves, flanges and butt-welded fittings for oil, chemical, natural gas and electricity generating systems. The company's R&D department can develop sophisticated industrial valves meeting customer specifications.
Jun's globe valves come in pressure ratings of 150, 300, 600, 900, 1,500 and 2,500 lbs and range in size from two to 20 inches.
The ISO9001-, CE, and API-certified company says it has seen consistent growth in sales since the middle of 2005. Sales increased to more than US$13 million last year from US$8 million the year before.
Jun follows a strict quality-control system at its factory in China, earning it a strong reputation for delivering top-notch products. The company also pulls out the stops to get products delivered quickly.
Jun's 120 workers are well trained in making valves. Jun says it has exported products to 27 nations, mainly to the U.S., Europe, the Middle East, South America, India, and Asia. The firm exports products to these markets under its "Jun" brand.
The company also specializes in customized products. Over the past several years, it has teamed up with some foreign partners to produce industrial valves on an OEM basis. The company is confident that it can secure more OEM orders in the years ahead based on its strong reputation in the international marketplace.
High-tensile Springs
Tyau Yang Spring Co., Ltd., established in Chiayi City in 1984, is one of Taiwan's top manufacturers of precision industrial springs.
The company claims to be one of a few domestic manufacturers able to make a wide range of industrial springs, from tiny 0.1mm springs to 52mm super-high-loading springs. The company also can help customers modify product specifications for specific applications.
The company's products are widely used in the automobile, motorcycle, electronics and machinery industries.
"Our commitment to R&D has helped us win the trust of our customers at home and abroad," says company president Chen Tyau-yang. "A large portion of our output is made on an OEM and ODM basis, indicating the reliability of our production skill."
Recently the company completed development of music wire made of No. 9254 silicon-chrome alloy steel. The company says that quotations for such music wire are generally set at about NT$120 (US$3.63 at US$1:NTY$33) per kilogram, while carbon-steel wire commands about NT$50 (US$1.51) per kilogram.
The company has steadily installed new precision production equipment and inspection instruments over the years. It currently uses advanced machining centers, CNC spring-making machines, and computerized inspection devices.
Tyau Yang's products meet Taiwan's CNS industrial standards. "Although we haven't apply for international certifications for our products, our products certainly meet the high-standards demanded by those standards in highly industrialized nations," Chen notes.
At present, the company sells 70% of its output to the domestic market and exports the rest to Japan, the United States and other overseas markets.
Despite substantial growth in sales in the first half of this year, the company began to feel the impact of the global financial crisis in the second half. The company has been keeping inventory levels strictly under control until calmer market conditions prevail.
Precision Forging Parts
Grand Forging Industries Co., Ltd., established in 1989, is one of Taiwan's oldest manufacturers of precision forging metal parts for a variety of industries. The company makes its products with automated production equipment.
Over the years, Grand Forging has been consistently improving product quality. The company gained its ISO9001:2000 certification four years ago.
The company's main forged products are automobile and motorcycle parts, hand tools, bicycle parts, and hardware. At present, the company is capable of rolling out two million forged parts per month.
Over the past few years, the company has been tilting to the development and production of parts for automobile air bags, which are mainly supplied to the U.S. aftermarket. The company says it is constantly developing new products to meet customer needs.
While the global automobile market faces new headwinds, the company is optimistic that its focus on quality and trust will position it well to weather the storm and enjoy even sunnier days ahead.