Wise Center Sees Explosive Growth in Asia as European Sales Slump

Focus on innovative high-end products keeps garden tool maker expanding in unstable times

Wise Center Industrial Group Inc., one of Taiwan's most globally competitive suppliers of garden tools, has experienced an explosive growth of sales in Southeast Asia, offsetting declines that have afflicted the European market in the wake of the debt crisis there.

Founded in 1991 in the central Taiwanese city of Taichung, Wise Center has developed into one of the island's biggest garden tool suppliers in terms of shipments. It now has plants in both Taiwan and China.

Backed by time-tested know-how, consummate production capability, and constant attention to the pulse of the market, Wise Center has built up a strong profile as a top-end original equipment manufacturer (OEM) and original design manufacturer (ODM) with a high reputation among professional buyers and such major international brands as Stanley and Black & Decker. The company puts strong emphasis on input quality control (IQC), in-process quality control (IPQC), and quality assurance (QA), enjoys ISO 9001:2000 certification, and its products meet Germany's GS (GeprUfte Sicherheit) standards. It boasts an output defect ratio of less than 1 per million.

The Boom in Southeast Asia
Wise Center has managed to maintain a robust rate of growth over the past few years despite the fluctuations in the global economy—and especially the persistent slump in Europe, the biggest export market for Taiwanese suppliers of higher-end garden tools.

Chairman Thomas Lin explained that his firm's growth in the first half of this year was driven mainly by booming sales in Southeast Asia. “In fact,” he noted, “our shipments to the U.S. have been delayed partly by our customers' over-optimistic sales forecasts, while shipments to Europe have remained weak due to the increasingly sluggish consumer market there. Fortunately, strong sales growth in Southeast Asia, and especially China and Thailand, has sustained our company.”

Strong sales in China, Lin commented, resulted from the increasing maturity of the market there after years of development. “More and more local buyers there are interested in Taiwan-made garden tools rather than Japanese-made tools because of cost and copycat considerations, and rather than locally made products due to unreliable quality,” he explained. “Following years of experience, they have realized that Taiwan-made tools offer a greater balance of price and quality, and are an ideal option for satisfying local professional end-users.”

Lin said that when Wise Center was developing the domestic market in Taiwan years ago, when the market was just taking off, the company worked with municipal agricultural organizations to offer functional, high-end tools for trial use by local crop growers, and utilized the instructive experiences of the users to boost its promotion.

Lin also reported spending considerable resources studying the correlation between market demand for tools and the types of crops grown in different regions so as to make sure the company's products are supplied where they are truly needed. For example, he said, the sale of professional-grade tools in China's northern provinces have grown more strongly than in other regions, mainly because of a successful marketing strategy that was worked out after observing that the country's cash crops, which especially call for better tools to harvest, are grown mostly in cold areas.

The whopping growth in Thailand, Lin noted, may have been due to the huge demand for tools for reconstruction following the months-long flooding there last year. “Local buyers in Thailand have significantly increased the frequency of their orders with us since the beginning of this year, for unknown reasons,” he reported. “The boom was perhaps fueled by post-flood reconstruction. To ride the wave in demand, we've reinforced our partnerships with Taiwan's agricultural tool and machinery associations to boost our presence in Thailand.”

Promising Prospects
Prospects for the company are even brighter for the remainder of this year and 2014, Lin believes, for several reasons.

First, talks with a number of big-name customers for new deals are about to be closed. “These customers come to us because of our strong ODM capability,” Lin said. “Hopefully, their orders will pump considerable growth momentum into our company starting next year.”

Second, old customers are returning to Wise Center. Lin disclosed that a former Australian customer, which once brought ratchet loppers from the company where Lin formerly served (Lin himself developed production of Taiwan's first ratchet lopper more than two decades ago), has come to him with a new order.

Another reason for optimism is the expanded distribution network that Wise Center has set up for its branded products throughout the world, especially in emerging countries. “Following years of looking for agents and distributors, we've successfully established footholds in China, Thailand, Myanmar, Indonesia, India, Turkey, and Iran for the local distribution of products under our ‘Wiseya' brand. Our branded sales have steadily increased, from 5% of the total last year to 7-8% now. Ninety percent of that growth has come from Asian nations.” The ratio of branded product sales is expected to continue growing in the years to come.

Competitive Optimization
Another reason for the rosy outlook at Wise Center is the “competitive optimization plan” that Lin implemented some years ago and that, he thinks, has made the company better and stronger.

The plan was designed to enhance global competitiveness in the increasingly challenging market following the rise of underselling rivals from emerging countries by restructuring the firm's internal operations from the ground up.

Part of the plan involves the building of TS16949-compliant standards for production and other operations. In an interview with CENS last year, Lin noted that the implementation of production and quality management that complies with TS16949 requires considerable effort and is a lifetime job, but that it is necessary as a means of showing customers that the company is capable of generating added value for them as well as turning out good products. The company has worked with local universities and research institutions to optimize and standardize its operations, and so improve yields and operating efficiencies.

Wise Center has also devoted efforts to building a worker-friendly work environment and boost its profile among foreign buyers; as Lin pointed out, foreign customers tend to judge the quality of a supplier not just by the products it supplies, but also by its day-to-day activities including its work environment and human ecology. In this respect the company has been striving to obtain certification from related organizations, such as Europe's Business Social Compliance Initiative (BSCI).

Lin reported that this year the “competitive optimization plan” has been expanded to include implementation of the Taiwan Training Quality System (TTQS), explaining that this is a system established by the Taiwanese government as a derivative of ISO 10015 standards for personnel education and training. Wise Center has used the system to conduct a series of analyses aimed at evaluating each employee's knowledge and expertise, skills, and abilities, and then to work out the best performance-enhancing education and training programs.

“We've taken advantage of the government's resources, with help from professors, to implement TTQS this year,” commented the chairman. “The results have been positive, and our workers have been retrained more systematically, effectively, and efficiently so that they are better fitted to their jobs. We will continue carrying out TTQS next year to further upgrade our overall competitiveness.”

This effort is just part of the company's journey along the road to sustainable development, toward the goal of becoming the world's top-end supplier of garden tools.

Innovative Products
After decades of concentration on R&D, Wise Center today offers a comprehensive range of products encompassing pruners, tree pruners, handle tools, gardening peripheral equipment and parts, shovels, flower scissors, branch pruners, water pipe shears, lawn shears, step stools, ladders, lapping shears, hedge shears, pruner shears, grass shears, tree pole pruners and saws, and long-reach shears. Its catalog also includes aluminum zinc castings, lighting fixture parts, household hardware, plastic products, building materials, molds, and forged and die-cast products.

Lin said that his company aims to boost its brand image by developing a more comprehensive range of products in 10 different product families for cutting and trimming shrubs, trees, fences, and lawns, and for other special purposes.

One of the newest items to go into mass production is a telescopic lopper with an improved handle design that makes the tool more multifunctional and innovative. Lin described one of the handles as having a button that enables users to adjust length easily, while the upper side features a special structural design that allows the changing of blades for different purposes. The ratchet inside has a dual-pivot structure for smoother operation and effortless cutting. The plastic handles and housings coupled with lightweight metal tubes and interchangeable blades give the tool an impressively compact shape.

Lin also revealed the development of a brand-new electric garden tool, scheduled for launch in the near future, which has a brushless servo motor, lithium battery, and improved transmission system. “We've spent a lot of time and resources studying electromechanical integration,” the chairman commented, “in a bid to work out a high-performance, lightweight electric garden cutting tool. The progress is somewhat lagging, but we believe that our efforts are aimed in the right direction given the worldwide market trend toward lighter, easier-to-use garden tools that are friendlier to both female and DIY users.”

Lin stressed that his company is vigorously seeking out partnerships with small and medium-sized regional distributors and retailers in the U.S., and that some of them show great growth potential with customer bases consisting mainly of professional users. “The market demand for professional-grade garden tools is much more stable than for DIY-caliber models,” he said, adding that the locations of the partners, largely in suburban areas, will help Wise Center's products penetrate the market at once and make its name better known throughout the country in the future.