Ecoca Industrial Pursues Ambitious Revenue Goal With Transformation Strategy

Chairman S.C. Hsu of Ecoca Industrial Co., Ltd., a major lathe maker in Taiwan, projects the company's revenue to top NT$1 billion (US$33.3 million) by 2015, surging from the estimated NT$400 million (US$13.3 million) for 2013 and projected NT$600 million (US$20 million) for 2014.

Hsu bases the upbeat forecasts on his company's transformation strategy: to develop intelligent production lines and massive machines in addition to providing ODM (original design manufacturing) service. Also, like his domestic peers in the industry, Hsu estimates the global machine-tool market to recover in 2014.

The strategy aims to distinguish the company from its competitors when competition intensifies due to crowded market and the company's sales in China, which has emerged as Taiwan's No.1 market for machine tools, have obviously dropped along with the slump of its market over the past two years.

The company will initially pitch its intelligent production lines at makers of car transmission systems and steering systems, with massive machines primarily targeting railway, energy, and wind-power industries. And its ODM operation has been contracted by a Japanese big-name manufacturer.

In line with its massive-machine project, the company plans to invest NT$100 million (US$3.3 million) to expand its production site in Taichung City, central Taiwan. So far, it has introduced a massive lathe capable of processing workpiece as wide as 1.2 meters in diameter and as long as seven meters. It will initially promote this machine in China, Europe, and the United States.

Since own-brand operation has inevitably affected the company's global sales in some markets, namely Japan, the company has decided to set up ODM operation in hope of luring Japanese manufacturers seeking to pare production costs.

Ecoca has been promoting its “ECOCA” brand since 1988, when it migrated to computerized-lathe production from traditional lathes since its 1980 establishment, having built its brand in over 30 countries.

Hsu points out that ODM operation can help boost the company's product quality and engineer capability not to mention adding revenue.

Ecoca's general manager, S.B. Shih, says a big-name Japanese manufacturer has begun working with his company on ODM deals since 2013 after assessing its management system. This year, Ecoca will install its second ODM production line to supply Japanese auto-parts makers. ODM sales have accounted for around 15% of Ecoca's revenue.

The company began implementing the FNPS Lean Production Management System installed by the Fair Friend Group, in which Ecoca is a member. Shih says the system has boosted the company's production efficiency by a quarter while shortening lead time to 45 days from 70 days.

In July 2010, Ecoca joined the Taiwan-headquartered Fair Friend, a major machine-tool manufacturing conglomerate in  China, Taiwan, Hong Kong, and Singapore, as well as a major  machining-center manufacturing group.

Hsu points out that his company supplies the fullest range of lathe specifications in Taiwan due to dedication to lathe research and development since its establishment. The company's lathe line ranges from high-speed precision lathe and teach-in lathe to PC-based lathe and CNC lathe, mainly targeting Turkey, Brazil, Italy and Germany as its primary markets. In 2009, the company branched out into production of vertical machining centers and double-column machining centers to diversify product line. (KL)