Machine-tool Parts Makers in Taiwan Recovering Amid Post-Recession

Acquiring overseas operations is one way to expand market globally

By BEN SHEN

After weathering the global downturn, Taiwan's manufacturers of machine-tool parts, mainly with modest capital, are seeing substantial sales growth in the first half due to a strong recovery of the world economy.

The machine tool parts line in Taiwan goes back five decades that has prospered with the domestic machine-tool manufacturing industry.

Many in this line are veterans and have been successful in exporting to industrialized nations by delivering high-tier machine-tool components made of imported high-quality materials. Another factor in their success lies in keeping huge inventories to quickly fill special orders, as well as investing considerably in developing unique technologies to produce innovative products.

Many have also installed advanced equipment as CNC (computerized numerically controlled) machine tools, while others have even acquired overseas plants in industrialized nations to boost global market share.

Customs statistics compiled by the Taiwan Association of Machinery Industry (TAMI), show that Taiwan exported US$277.636 million of machine-tool parts in the first five months, up a whopping 105% from US$135.424 million of a year earlier, to which . TAMI president C.C. Wang attributes the strong recovery of the machine tool industry worldwide.

Foreign Acquisition

Following the acquisition of Mega-F Corp. of Israel, Hiwin Technologies Corp., Taiwan's largest manufacturer of motion-control components, has acquired Matrix Corp., England's largest manufacturer of thread grinding machines, which will help to expand product line and boost presence in Europe based on Matrix's high brand recognition in Europe.

Headquartered in Coventry, the car-making hub in England, Matrix has over 350 years in history. The acquired plant was built in 1913 with products mainly supplied to the automotive, shipbuilding and ball screws sectors.

Eric Y.T. Chuo, chairman of Hiwin Technologies, says acquiring Matrix will add thread grinding machines to the company's product line. Also Hiwin will raise its sales to England to over 5% by 2011 relative to the current 3% of its total revenues.

Hiwin says its main product—ball screws—are produced by the thread grinding machines from Matrix, whose acquisition will help to cut procurement cost, as well as raise production capacity.

To be settled by the end of August, the confidential acquisition is kept so by both parties, with an industry insider estimating the deal to be worth approximately NT$1 billion.

In 2009 the Hiwin Group's major subsidiary--Hiwin Microsystems Corp.—acquired Mega-F, an Israel-based manufacturer of motion and control systems, with an aim to boost global competitiveness in the robotic arm arena, with the takeover also being significant, having raised Hiwin's production goal to 50,000 sets this year, up 2.3-fold from the original 15,000 sets.

New Factory

Hiwin says it is building a new plant in the Taichung Precision Machinery Park, Taichung, central Taiwan, with the building to be completed by the end of this year, when production capacity will rise over 30% to concentrate on producing ball screws and industrial robotic arms. Expansion efforts will help Hiwin achieve output of robotic arms exceeding NT$700 million this year from last year's NT$400 million.

Hiwin scored NT$3.317 billion in sales in Taiwan in the first half of 2010, up a whopping 165% year-on-year or up 80% from the same period of 2008. With backlogged orders exceeding NT$10 billion, the company sees order visibility till the first quarter of next year.

Chuo says his group's annual sales will hit a new high of NT$12 billion this year because of the recovery of the machinery, automotive, solar-energy and medical-care industries worldwide. The Hiwin Group aims to generate NT$20 billion in annual sales in 2011 to become the world's second-largest manufacturer of ball screws and linear guideways.

Hiwin is currently Taiwan's sole manufacturer of magnetic-levitation (MagLev) motors, as well as making testing machines for Japan-based Sharp Corp.'s tenth-generation large-sized TFT-LCD (thin film transistor-liquid crystal display) flat panels. Recently, the company landed big-ticket orders from Apple Computer Inc. for laser cutting positioning systems to begin delivery sometime this August.

With trial production underway in its new plant in the Yunlin Science Park of central Taiwan, Hiwin will recruit 1,500 workers in the second half of this year, and another 2,000 workers in 2011 once its headquarters and a new plant in Taichung City will have been completed.

Rotary Tables

Safeway Machinery Industry Corporation, founded by C.W. Hong with investors in 1985, began life backed by the founders' technological background in mechanical R&D.

Initially Safeway mainly manufactured drill index heads, then in 1986 began producing lock-down mechanical/hydraulic vise, which were immediately well accepted by customers for good quality and stable hydraulic pressure.

To meet the booming development of the domestic CNC machining center manufacturing industry, in 1987 the company began producing MC compact mechanical/hydraulic vise especially for machining centers.

“Innovation and service come first” is the company's motto, coupled with offering customers versatile products and services.

With years of manufacturing experience in precision vises and clamping devices, Safeway rolls out a full range of products suitable for different industries, claiming to have evolved into a world-class CNC precision vise manufacturer.

The company recently introduced two innovative products, including the drill grinding machine and twin-wheel drill grinding machine. Available in three models and for different sizes of drill heads and equipped with CBN sand wheel, the drill grinding machine works on high-speed-steel drill heads, as well as being simple to use, accurate and portable.

The twin-wheel drill grinding machine is suitable for high-speed-steel drill heads and tungsten-carbon drill heads.

Power Chucks, Rotary Cylinders

Another domestic manufacturer focused on production of precision components for machine tools is Autogrip Machinery Co., Ltd., formerly Chia Her Machinery Co., Ltd., a professional manufacturer of power chucks and rotary cylinders since its founding in 1989.

Headquartered in the suburb of Puhsin township, Changhua County, central Taiwan. Autogrip has a 43,200 square foot factory, and is renowned for innovative products due to its in-house R&D department, which helps to develop precision products that further solidify its reputation as a technology-oriented manufacturer.

Besides being SLG ISO9001 and CE safety certified, the company promotes its own brand of Autogrip, now often regarded as synonymous as being strong and precise.

Over the past several years, the company has expanded its line to include a complete set of 18-inch-and-under series, and related products as rotary joints and valves for cutting fluid, facing heads, and synchronous clamps.

The company's products can be roughly divided into six categories: power chucks, rotary cylinders, synchronous clamps, facing heads, rotary valves/rotary joints, and standard jaws.

Autogrip's power chucks and rotary cylinders certified to SLG, CE, and ISO9001 standards, and the company says it will continue to improve quality and strengthen after-sale services.

To ensure high quality, the company employs CNC lathes, grinding machines, machining centers, rotary cylinder testing instruments, and pressure testing machines.

Autogrip's three-jaw through-hole power chuck features high-rigidity and high clamping accuracy. Its rotary cylinder has a built-in check valve to prevent sudden decline in internal pressure.

In the middle of this year, the company introduced a new product line—the large-sized hollow rotary hydraulic cylinder with 165 and 205mm in hole diameter, as well as focusing to develop an extra-large chuck series to be launched soon.

Autogrip mainly exports to China, Europe, and the U.S., as well as having achieved more sales in Eastern Europe and India, and set up five after-sale service points in China to offer quick after-sale service, including Beijing, Shanghai, Ningbo of Zhejiang province, Nanton of Jiangsu province, and Guangzhou of Guangdong province.

Spindles, Tailstocks

Fepotec Industrial Co., Ltd., established in 1996, is one of Taiwan's few manufacturers of spindles and tailstocks for a variety of high-precision, high-performance machine tools. In January 2009, the company moved production facilities to a new 14,400 square foot factory in Wujih township, Taichung County, central Taiwan.

The company has always focused on the development of state-of-the-art spindles and tailstocks for machine tools. “With our expertise and professionalism, we have built good reputation both at home and abroad,” says Allen Wen, the president.

The company's product line includes lathe spindle, lathe tailstock, grinding machine spindle, machining center spindle and semi-conductor-use spindle, also having recently introduced high-speed built-in spindle for the semi-conductor industry and high-speed spindle for the printed circuit board (PCB) manufacturing sector.

Featuring high rigidity and accuracy, the company's spindle is suitable for machining centers running between 6,000rpm and 12,000rpm, with custom designs also accepted.

Claiming to have customers as large manufacturers of machining centers as Leadwell CNC Machines Mfg. Corp. and Tatung-Okuma Co. in Taiwan, the company says its products pass strict tests for noise, rigidity, accuracy and dynamic balance.

Thanks to its efforts to develop sophisticated products, the company has seen double-digit growth in annual sales over the past five years, after breaking the NT$500 million mark in 2009.

“We will continue to upgrade our R&D and manufacturing capability in-house, as well as our management system in the next few years to become a world-leading manufacturer,” says Wen.

The company claims to export to U.S., South Africa, China and other industrialized nations in Western Europe, also supplying products meeting ISO standards to raise sales globally.