Taiwan's Plastic Extrusion Machine Makers Boom as Global Economy Recovers

High quality, reasonable prices help gain market share

Instead of being discouraged by the recession of 2008 and 2009, Taiwanese makers of plastic and rubber extrusion machines poured more effort into R&D and market diversification in their struggle for survival. The effort has paid off, and the manufacturers are now reporting a rebound in sales.

Statistics compiled by the Taiwan Association of Machinery industry (TAMI) show that exports of plastic and rubber machinery slumped from NT$1.06 billion in 2008 to US$769 million in 2009. With the global economic recovery and improvements to their high-performance, reasonably-priced products, however, Taiwanese makers of plastic extrusion machines recorded exports worth US$321.68 million in the first four months of this year, up 51.4% from a year earlier.

Furthermore, the signing of the Economic Cooperation Framework Agreement (ECFA) between Taiwan and China will give Taiwanese makers wider access to China's huge domestic market. This is especially important, since certain types of high-end machine tools have been included in ECFA's “early harvest” list.

The ECFA signing is also expected to give momentum to Taiwan's effort to sign free trade agreements (FTAs) with other countries, which will provide Taiwan with a more level playing field in overseas markets.

Poly Machinery

“Market conditions have turned increasingly favorable for Taiwanese companies, and we expect stable growth in the industry during the next several years” said Chang Jin-chiu, president of Poly Machinery Works Co.

Poly Machinery, founded in 1969 in Taipei, northern Taiwan, has accumulated more than 40 years of experience in designing and producing machines for making EPS (expandable polystyrene) and EPE (expandable polyethylene) products. Chang claimed that his company was Taiwan's first developer of machines for processing foam material.

The company supplies a wide range of plastic extrusion machines including EPS and LDPE (low density polyethylene) sheet extrusion lines, EPE foam sheet extrusion lines, EPE tube- and rod-making machines, EPE foam net machines, EPS disposable container machines, laminating machines for food packaging materials, laminating machines for cement bags, heavy-duty laminators, and other peripheral equipment. All of these machines have proven popular in Japan, Canada, the U.S., Australia, New Zealand, Poland, Ukraine, Russia, the Middle East, and Latin America.

Regarding its development of extruded XPS (polystyrene) foam plank making machines, Chang conceded that the faltering fortunes of the construction industry have severely hammered his company over the past few years. “Products made of XPS are used mainly as building materials,” he explained, “so it is no wonder that we didn't receive any orders in the second half of 2008 or 2009. That made us explore the possibility of developing more new markets and working more on R&D instead of keeping busy with manufacturing alone, as we did before.”

Diversification

Chang reported that Poly Machinery has coped by taking the road of market and product diversification, and that this has helped the company remain in relatively good shape during the global economic downturn of the past two years.

Sales fell by only 10% in 2009, a performance that Chang attributes to his company's years of effort at exploring emerging markets. The company noticed the importance of market diversification many years ago, and actively built links with customers in emerging countries. “Market demand in Central and South America and Southeast Asia has been growing stably,” stated Chang, “and this has offset our loss of sales in the advanced countries.”

Exploring new markets is often easier said than done for an SME (small or medium-sized enterprise), unless—like Poly Machinery—it has consummate manufacturing capability and is keenly sensitive to customer satisfaction. Chang noted that his company, backed by its 40 years of experience, designs and develops plastic extrusion machines to satisfy each customer, helping it to carve out success in different areas. The company also places strong emphasis on customer services, effectively differentiating itself as a provider of turn-key solutions.

At the same time, the company has been engaged in the development of more new plastic extruders and related machines. For instance, it has independently developed a series of plastic forming machines. “Two years ago when the market looked bad,” Chang explained, “we decided to become involved in such machines. We drew on our experience and spent considerable effort to improve functionality and speed, and finally shipped our first machine to a customer this year. It was a painstaking journey, but it enhanced our competitiveness.”

It is because of such strategies, Chang said, that his company has seen an influx of orders in the first half of this year. The company plans to explore the Japanese market with functionally user-friendly and visually innovative plastics machines, and to increase its participation in international trade fairs in the coming years. “As long as the global economy goes well,” Chang concluded, “we will remain optimistic about the future of the industry.”

Matila

Jimmy Shen, president of the Matila Industrial Co., is another top entrepreneur in the line, leading his company to cash in on the growing worries that companies have about constantly rising materials costs and the consequent effort to minimize the use of materials.

Matila started out as a small trading company in 1988, and later on branched out into the production of bag-making machinery to fill a gap in the ability of Taiwanese suppliers to make such machines that were acceptable to clients from advanced countries. After years of extensive, focused research and engineering studies, the company has evolved into a world-class supplier of a variety of bag-making machinery such as side-sealing bag machines, soft-loop handle bag machines, patch handle bag machines, die cut handle bag machines, and poly draw handle bag machines, as well as blown film machines, water cooling recycle machines, recycling equipment, and flexographic printing machine.

The company is one of only a few machinery suppliers in Taiwan that have been able to cushion the impact of the global economic recession, thanks partly to stable demand from manufacturing industries and partly to the niche that has been carved out and occupied by Matila's high-profile machines.

Functionality-oriented Machines

Shen's belief that producing good machines hinges on knowledge of raw materials, operating experience, and precise design and manufacturing has led to his company's success in offering products that are claimed to outperform those of most rivals in functionality and efficiency.

The company's multi-layer co-extrusion blown film line (model CT-FL5/54445-1500), for example, is built with a five-layer stack-type co-extrusion die coupled with an inner bubble cooling system, 1500mm oscillating take-off unit, and SA-type back-to-back winder, making it perfect for turning out barrier film. To assure the unmatched performance of these machines, the company employs high-torque gear boxes with direct-drive inverter motors imported from Germany, and offers a variety of optional equipment.

The ability of Matila's recycling and pelletizing line to turn plastic waste—PE andPP sheets and bottles--into useful material is perhaps more noteworthy. Shen said that his CR-series machines, all with crushers, storage tanks, feeding systems, extruders, and water cooling type die face cutting systems and centrifuges, have production capacities ranging from 100 to 450 kg per hour. This allows them to meet the needs of enterprises that have to cope with skyrocketing prices of plastic while trying to achieve optimal production efficiency.

Shen emphasizes that his company is determined to remain focused on the development of function-oriented machinery, and to continue contributing to the future of Taiwan's plastic and rubber machinery industry.

Leader Extrusion Machinery

Michael Chen, sales manager of the Leader Extrusion Machinery Ind. Co., is not worried that the competitiveness of Taiwanese manufacturers might be eroded by emerging rivals or other negative market factors. “Our industry has entered its golden age in the recent years,” he said confidently, “and that golden age will continue into the next decade.”

Leader Extrusion Machinery has a history of more than 20 years and is headquartered in Taichung County, central Taiwan. It is one of the island's top suppliers of plastic extrusion machines that, with performance and quality said to be comparable to products made in Germany and Japan while commanding much lower prices, are popular in markets around the world.

The company's product line covers plastic extruders, extrusion machines, plastic machines, PP hollow profile extrusion machines, PC and ABS co-extrusion machines, optical sheet extrusion lines, PMMA and PC sheet co-extrusion machines, A-PET and PET-G sheet co-extrusion lines, PP corrugated sheet extrusion machines, CPP film extrusion machines, PET film co-extrusion machines, TPU film co-extrusion machines, and PET and PVC shrinkable film extrusion lines.

Weathering the Economic Downturn

Chen said that his company was not bothered by last year's global economic meltdown, thanks mainly to the rise of optoelectronic technologies and related applications in Taiwan. “Domestic high-tech companies of this kind continued working on R&D in 2008 and 2009, meaning that they had to add new plastic machines into their production lines,” he explained. “They chose to place their orders with us because of their familiarity with our company's name. This gave our sales a strong growth momentum in the first half of 2009; and, with the global economy turning upward again, returning orders from international customers helped to fuel our sales in the second half. ”

The continuous introduction of new high-performance machinery also helped keep the company growing in 2009. For instance, flat/corrugated extrusion sheet lines, unveiled in 2008, became one of the company's hottest sellers. These lines feature fully automatic feed systems with the capability of measuring 10 kinds of recycled materials, raw materials, and additives simultaneously, and of adjusting feed amounts automatically to meet different requirements. Built with a high-productivity twin screw extruder, automatic filtration system, gear measuring machine, and 45° calendar, as well as the finest parts and components, these machines boosted the firm's sales last year.

With the global economic recovery resulting in booming orders, Chen reported, Leader Extrusion Machinery's sales for the first half of this year soared 50% over the same period of 2009. He expects sales for the year as a whole to double from 2009. “In fact,” he said, “the future of Taiwan's plastic and rubber machinery industry is getting brighter, because buyers from emerging markets are turning increasingly to machines tagged MIT (Made in Taiwan) after years of trying cheaper, but inferior, models. Furthermore, the global financial crisis has resulted in a more conservative buying atmosphere in the market, which helps Taiwanese makers take over global market share from our Japanese rivals, especially since the Japanese have gradually given up the market in recent years because of cost considerations.”

Chen confirmed that his company will explore emerging markets like India, China, and the Middle East to assure sustainable business growth, and that, following the signing of ECFA, it has been evaluating the feasibility of building a fully owned factory in China. “We must accelerate our move upmarket if we want to remain technologically and creatively competitive in the global market,” he stated. “Becoming a top-notch plastic extrusion machine supplier is our target for the coming decade.”