Packaging Machinery Export Heyday, and Challenges, Ahead

Early this year at a packaging-industry forum held in Taiwan, participants unanimously agreed that Taiwan exports in this sector would maintain their high growth momentum over the next few years, building on a trend that has been apparent in recent years.

H.R. Kao, publisher of Taiwan Packaging magazine, estimated that Taiwan packaging machinery exports will rise to account for 60% of total output in the segment, up from 40% at present. Markets of high potential that he expects to fuel this surge include Russia, Brazil, and India.

Some panelists pointed out that there are three major factors that players in the local industry have to overcome in order to boost exports: small-scale operations, weak after-sales service support, and limited marketing capabilities.


Over 90% of the island's 200 or so packaging-equipment manufacturers are capitalized at less than NT$50 million (US$1.61 million at US$1:NT$31), and scant investment funds generally restrict them to producing tailor-made items in small volumes. This has hampered their ability to compete with Japan, Europe and the United States in the market for integrated machines.

In their battle for market share, local packaging machine producers still have cost and performance on their side. More than 30 years of development have enabled domestic manufacturers to produce about 95% of the parts they need, and with self-sufficiency has come cost savings. As a result, packaging machines made in Taiwan are typically cheaper than rival Japanese models, and they often outstrip their Japan-made counterparts in functions as well.

Expanding in the Shrinkable Film Market

Benison & Co., Ltd., Taiwan's No. 1 supplier of PVC/PP/PE (polyvinyl chloride/polypropylene/polyethylene) heat shrinkable films and machines for packaging with the materials, is among the local firms working to boost exports. "The next three years will be a critical to the success of this plan, " says company general manager Benker Liao.

Liao, whose father opened Benison in 1962, says that mainland China and Taiwan cannot meet his company's growth needs, forcing the firm to tap new overseas markets. At home, the company controls at least half of the film and equipment markets.

Liao aims to make his company's equipment more valuable and attractive through alliances with complementary equipment suppliers at home and overseas to supply whole-plant solutions. "In Taiwan, we plan to contract with manufacturers of high-quality machines to supply us with their specialty models. Abroad, we plan to act as a contract supplier of international heavyweights, " he says, elaborating on his company's internationalization strategy. If the alliances succeed, Benison will open assembly facilities and warehouses in the markets where its major partners operate.

Benison has targeted several potential markets outside Taiwan and mainland China, but Liao declines to specify which markets for fear that his domestic rivals will follow suit. Undercutting threats from industry newcomers in Benison's existing markets is part of Liao's reason for diversifying into new territory.

Liao notes that many equipment suppliers have shown interest in his plan, although they have yet to agree to the formation of alliances. However, he is confident than such tie-ups will succeed as equipment suppliers are under mounting competition pressure.

In preparation for any possible partnership deal, Benison has been aggressively cultivating international trade specialists. According to Liao, the company will triple its number of such specialists to 15 in three years by recruiting professionals conversant in various languages, such as French and Spanish.

Liao says that his company is the most qualified Taiwanese manufacturers in its industry in terms of tapping overseas markets, thanks to its quality manufacturing and international trade capabilities. Since its establishment in 1962, the company has earned ISO 9001 and CE certifications. "We could be the only ISO 9001-certified Taiwanese supplier of heat shrinkable film equipment today, " he says.

As part of its international marketing strategy, the company will not promote its "Benison" brand name in markets where it supplies machines on an original equipment/design manufacturing (OEM/ODM) basis. Rather, it will focus its brand sales in Taiwan and emerging economies like mainland China and Southeast Asian nations.

Although competition in the world market for packaging machines is intense, Liao is confident that his company can win market share through its strategy. "In emerging economies, our advantage is quality. In industrially advanced markets, low price is our main edge, " he notes.

Benison's product advantage can be seen in the company's latest products, including the LA-100 level applicator, which can wrap bottles in diameters from 40mm to 100 mm at a rate of 500 per minute; and the L-type packaging machine, which can deliver 20 packages in length ranging from 800mm to 908mm per minute. They are big machines, which posed tough technical challenges for the company in the development stage. "The bigger the machines are, the more technological difficulties we face, " Liao notes.

For a long time, Benison has specialized in machines for packaging food, medical products, electronic equipment, hardware, toys and other products in width ranging from 6mm to 1, 000mm.

Benison is already a contract supplier to several Japanese companies and it is now in talks with some big players over OEM supply deals, according to Liao.

Liao closely analyzes market trends to find out which types of machine are in greatest demand. His company then focuses on the most common machine type within that segment in order to maximize output volume and bring down production costs. "In the packaging-machine sector, customers are more demanding in terms of efficiency, application range, package looks and substitutability, " he notes.

Liao says his father learned heat shrinkable film techniques from Japanese suppliers and opened a business in Taiwan. It was only in 1986 that his company began branching into equipment manufacturing, boosting output and profits as well as expanding the company's customer base. The film, Liao notes, was first used to wrap bamboo poles as a substitute for painting. "Today, it has penetrated nearly every corner of our life, " he says.

Paper or Plastic

Career Industry Corp.'s export expansion strategy hinges on constantly rolling out new highly efficient machines. It now makes machines with microcomputer controllers, improving cutting precision on packaging materials, according to export manger Chris Tseng.

The company's product line includes spiral paper-tube winders, paper-roll stands and gluing systems, slitters and rewinders, POY/FDY/DTY/OE tube-finishing machines, angular cardboard/paper cone-making machines, as well as hot-melting, glue coating, and laminating machines.

According to Tseng, Career's machines adopt microcomputer controls as well as circular saws, multi-knife designs and dust-collection devices. The saw device is designed for cutting thick materials while the knife system can boost output. The dust-collection device collects cut particles for recycling.

The company's spiral paper tube winding machines deliver average output speeds of one meter to 30 meters per minute with materials in thickness ranging from one millimeter to 20mm. Its slitting and rewinding machines can handle roll widths ranging from 1, 000mm to 2, 200mm and roll diameters of 1, 000mm to 1, 500mm. Its paper-tube finishing machines put out 30 to 40 units per minute. The company's angular-cardboard making machines have an average output efficiency of five meters to 20 meters per minute; and its glue-coating machines have average output speeds of 120mm to 1, 100 mm per minute.

According to Tseng, Career is one of only five suppliers of paper-tube making machines in Taiwan capable of supplying whole-plant designs and equipment. His company sells most of its output to Russia, Latin America, the Middle East, the United States, and Taiwan. He says that the mainland Chinese market, while highly competitive, offers much potential. He says that the Chinese mainland's textile industry is estimated to grab up to 40% of the U.S. textile market in two years, meaning more business for machine suppliers like Career.

Tseng's company recently shifted attention to paper-packaging machines from plastic-packaging machines as Taiwan's plastic processors have relocated to the mainland in greater numbers than have local textile manufacturers.

Tseng says his company's business has grown moderately so far this year, and he expects revenue for this year to rise from last year's US$3 million.

Pressing Forward

Founded in 1968, SBL Group makes post-press machines, a front-end unit used in the packaging industry, including units that can handle printed package materials.

Among SBL's latest offerings is the SBL-1050SE Avior, an updated version of the company's SBL-1050SE, delivering a maximum cutting speed of 9, 000 sheets of printed materials an hour versus the SBL-1050SE's 7, 500 sheets. This unit has a maximum cutting size of 1, 040mm x 730mm for materials in size ranging from 400mm x 370mm to 1, 050mm x 750mm. SBL will debut a new version of the machine in the middle of this year.

The SBL-1050SEH is another feature-packed model from SBL, with alloy grippers, a push-and-pull side-guide device, non-stop feeding and delivery system, touch-screen control and troubleshooting monitor, device for adjusting cutting pressure, stripping tool for removing waste, heating-die cutter, programmable-logic controlled 10 heating-zone system, and device to keep the machines running when circuits break. The unit has a maximum cutting pressure of 300 tons, and its maximum heating temperature is 90 degree centigrade. It cuts papers and plastic materials including PP, PET and PVC.

"Our machines run efficiently and deliver high output, " says marketing manager Patrick Hu. Hu says that his company's machines have many convenient features, like human-machine interface (HMI) and optical sensors, which greatly facilitate operation. "Before these devices were used, the machines had been manually adjusted and controlled, " he says.

Hu believes that Taiwan's packaging industry has made impressive progress over the past few years in terms of boosting equipment efficiency and upgrading output speed. Locally made machines, he says, can process up to 9, 000 sheets per hour with an error tolerance of under plus and minus 15 mu.

SBL has earned ISO 9001 and CE certifications, as well as the Dragon Award cited by the Ministry of Economic Affairs (MOEA).

According to Hu, SBL supplies up to 85% of the post-press machines sold in Taiwan. "There are only a few local suppliers in this segment, so competition is limited, " he says. His company exports 80% of its output to such markets as mainland China, the U.S., Canada, Italy, Germany, Great Britain, France, Poland, Hungary, Japan, India, Turkey, Singapore, the Philippines, Indonesia, Brazil, Chile, and South Africa.

Hu expects his company's business to grow by 20% to 25% this year considering the bright market conditions. His company has opened branches in the United States and the U.K. to better serve its customers.

Adapting to Changing Markets

S-dai Industrial Co., Ltd. Specializes in making machines for turning out garment, stationery, and flower packaging. The company has pinned its survival on manufacturing machines that are easy to use, while also branching into niche markets such as machines for cutting printed-circuit boards, says company general manager Jiang Jyh-long.


When Jiang founded his business around 20 years ago, the company focused on machines for making garment package bags. Over the past 10 years or so, domestic manufacturers of such machines have moved offshore along with the island's garment manufacturers. Those that remained in Taiwan, Jiang says, have had to explore new markets.

Among the first new niches explored by S-Dai were the flower package and stationery package machine markets. These two new lines have grown over the years, helping the company offset dwindling sales in the garment package machine segment.

Over the past few years, S-Dai has introduced computerized machine models that can automatically and precisely adjust bag length. "Computerized models are 30% more efficient than manually controlled types, " Jiang says. The company's automatic machines can turn out 120 to 150 30cm x 30cm bags a minute. All the control programs for the company's machines are co-developed by its engineers and contracted software developers.

Jiang says that his company can undercut Japanese and German suppliers by 30% on price while rivaling them in quality. He attributes the feat mostly to Taiwan's well-developed electronics industry. "Many Japanese and German stationery manufacturers and flower shop operators now prefer our machines to the machines supplied by manufacturers in their countries, " he notes.

According to Jiang, success in the stationery and flower packaging machine markets depends on the ability of suppliers to meet customer demands for models that are attractive, precise, efficient and quiet.

All of the components used in S-Dai's machines are locally sourced, except for the servomotors, which the company buys from Japan.

Each month, S-Dai can produce 25 packaging machines, most of which go to emerging economies such as mainland China, Southeast Asian nations, and India. The company expects to boost shipments to Europe as soon as the circuit layouts of its machines comply with the CE standard.

PCB cutting machines are another solid revenue earner for S-Dai. According to Jiang, the company fills 80% of the specialty market. "This machine is very efficient and only a few units are needed to handle a large board volume, " he says.