NHS 2013 Attracts Strong Turnout by Professional Buyers
Taiwanese exhibitors take heart in the recovering U.S. economy
2013/09/03 | By Steve Chuang
One of the exhibitors was Mark Lin, chairman of the Taiwan Hand Tool Manufacturers' Association (THTMA) and owner of Yih Cheng Factory Co., Ltd., Taiwan's biggest producer of screwdrivers. Lin felt that there were more professional buyers at NHS this year, which is good news to Taiwanese hand tool suppliers who rely mainly on the U.S. market.
"The benefits of exhibiting at NHS have fallen over time, but we are inspired by the fact that quality buyers are returning to the show this year, and most of them are looking for something new here," says Lin, attributing this trend to the strong economic and housing recovery in the U.S.
Confidence High
Although some heavyweight buyers such as Stanley were absent from the show this year, Lin remained confident that Taiwanese hand tool suppliers would expand sales in the North American market this year as Taiwan-made hand tools gain recognition for quality among local buyers.
"There's no doubt that Taiwan's hand tool makers are technologically moving upmarket to differentiate themselves from competitors in emerging markets. This is evident in the position of their products mainly through local distributors and retailers at higher-end segments in the U.S." Lin further claimed that the value of Taiwan's handle tool exports to the U.S. was six times higher than that of China in 2012, compared to a ratio of 5:1 in 2001. The upward trend in Taiwan tool exports during the period attest to the success of Taiwanese suppliers in expanding sales through a focus on quality.
Lin says that major U.S. brands are returning to Taiwan tools chastened by consumers complaining about the poor quality of products sourced from emerging countries. The U.S. brands now realize again that their value is sustained by quality, not price. This trend and the recovering U.S.'s economy paint a bright outlook for Taiwanese suppliers in the U.S. market this year, he concludes.
Lin also reported that Yih Cheng's sales in the U.S. held steady last year despite weak consumer demand. He attributes this to his company's dedication to upgrading product quality and technology. The high-profile supplier demonstrated its Red Dot award winning Stripperdriver, a VDE screwdriver that can serve as a screwdriver, wire stripper and wire bender. The tool is ideal and convenient for electricians and its lightweight makes it suitable for long-time overhead work.
The tool has a special ruler and blade design and stripper button to facilitate wire stripping. Users can easily cut around the insulation with the tool by inserting a wire into the handle until reaching the certain scale, fixing it by pressing the stripper button and then rotating the handle while applying pressure to the button. Additionally, the button can also be used to bend wires. The innovative tool attracted strong interest among buyers at the show.
Lead Reduction Bill Revives Demand
Y.D. Wu, chairman of Plumbing Association of Taiwan, and head of Long Tai Copper Corporation, a Taiwanese veteran manufacturer of bathroom faucets, showerheads and valves, also agreed that professional buyers made up a big part of NHS turnout this year in stark contrast to the 2012 show.
"The significant number of professional buyers for faucets at the venue this year is mainly because of the S.3874 Bill," comments Wu. Designed to reduce lead in drinking water, the bill was approved by U.S. President Barack Obama in late 2010, and is scheduled to come into effect in 2014. From that time on, the lead content of faucets, drinking water equipment and related parts that water flows through must be less than 0.25% of the materials used.
The new rule is forcing distributors to restock inventories with products compliant with the new rules, boosting demand in a segment that has remained slack for years since the global financial economic crisis, Wu says.
Wu is pleased to see the market turnaround and expects it to benefit Taiwanese suppliers, as most of them are technologically capable of making lead-free products. "To enjoy the business pie, Taiwanese makers will have to try to secure reliable sources of almost entirely lead-free recycled copper," says Wu. He urges the government to help the industry navigate through this challenge.
Wu also mentioned that his company would certainly return to NHS in 2014. He will also encourage more Taiwanese peers to explore new market opportunities in the U.S. related to the enforcement of S.3874.
Founded in 1981 in Changhua County, central Taiwan, Wu's company Long Tai offers a wide selection of single and double-lever faucets, commercial faucets, showerheads and valves, and boasts ample experience in OEM (original equipment manufacturing). The company has BVQI and ISO 9001:2008 quality management system certifications and its products all comply with IAPMO, cUPC, and NSF 61-9 standards.
Repositioning for Sustainable Growth
Warner Chen, sales manager of Eason Hardware Corp., a veteran OEM and original design manufacturer (ODM) of wrenches, hammers and tool sets headquartered in central Taiwan, shared his viewpoints of the market's outlooks and emphasized that Taiwanese companies should reposition for sustainable development there.
Based on his observation following years of life in the U.S. with his wife, an American citizen, Chen pointed out that the U.S. market for hardware has improved this year, as reflected in the better quality of attending buyers at NHS 2013. "The market outlook for the coming years is strong, but some ongoing changes are worth Taiwanese companies' attention," he says.
Firstly, Chen said, U.S. consumers are becoming more price-sensitive and are cutting unnecessary spending. This means that manufacturers will have to place more emphasis on R&D to help customers attract increasingly fussy consumers. On another front, he continued, with the U.S. government considering imposing taxes on online transaction, many of local online sellers may choose to open physical stores to expand profit sources. Therefore, distribution channels are likely to restructure in the near future and purchase more conservatively.
Also notable is that Taiwan-made hand tools are moving into a higher market position in the U.S., a trend that Chen says has resulted from quality improvements by Taiwanese suppliers and also the displacement of these suppliers from lower market segments by cheap and lower-quality tools from China and India. "These changes will bring many opportunities, and challenges, for Taiwanese companies."
Chen believes that Taiwanese hand tool makers should try to build firmer ties with existing local customers, and seek partnerships with new clients, especially those with great branding potential, to prepare themselves for a changed market. Furthermore, Taiwanese companies need to innovate and reposition to develop competitive niches. They should also dedicate more effort to reinventing operations to achieve sustainable development.
To that end, Chen reported that Eason just set up four automatic warehousing systems and advanced manufacturing facilities in its new 7,500-square-meter headquarters completed in July, 2012, in Nantou County, central Taiwan. The company has also repositioned as a total solution provider, with the aim to draw on its decades-long OEM and ODM experience to meet customer needs in an ever-changing market.
Trendsetting Products
While less content with the turnout of NHS 2013 than other Taiwanese exhibitors, Alex Liu, manager of Taiwan Lock Co., Ltd., one of globally competitive manufacturers and developers of locks and lockers on the island, was still optimistic about the global influence of the show. His company's newest product, the Mini Locker Series KD (Knocked Down) received good reviews from the show's official reporters.
Liu said that the locker is developed in line with market trends for countermeasures to intelligence disclosure among high-tech companies. "Today, anyone can take photos and video clips with their smartphones and handheld electronic devices with cameras, which makes it more difficult for high-tech firms to stop commercial espionage and keep top confidential information safe," says Liu. "Lockers for temporarily storing handsets, digital cameras and laptops from employees and visitors are therefor in high demand in the high-tech sectors."
With its innovative design and flexible combinations, the Mini Locker was a hit at the show. According to Liu, each locker is designed with a USB battery charger for electronic devices, and offers different options of lock models, including coin operated locks and keyless locks. The lockers are stackable and come in a variety of colors. The series, already adopted by Taiwan's high-profile high-tech firms as Taiwan Semiconductor Manufacturing Co., Ltd. and United Microelectronics Corp., are suitable for use in offices, research facilities, government agencies, restricted areas, theaters and art galleries.
"The series is also ideal for home use," says Liu. "The lockers make a good gift for the kids and its stackability and colorful design make them a great addition to the home."
To enhance its international profile, Taiwan Lock opened a new 3,300-square-meter headquarters in central Taiwan in mid-2012. The company is also dedicated to developing new lockers for hypermarket chains, such as Wal-Mart, Carrefour, Trust-Mart, Tesco and Pakson. The company's extensive know-how in the lock business, including card locks, padlocks, digital keyless locks, coin-operated locks, combination locks, electronic door locks and RFID digital locks, as well as time-tested manufacturing capability, have further positioned the company as a top-end supplier in this segment.