cens logo

Luhai Seals Takes Top Spot in Global Tire Valve Market

Oct 31, 2014 | By Quincy Liang

President K.L Hsu (left) and Chairman Wu Chin-lu of Luhai Group, the world's largest tire-valve manufacturing group. (Photo from UDN)President K.L Hsu (left) and Chairman Wu Chin-lu of Luhai Group, the world's largest tire-valve manufacturing group. (Photo from UDN)

Not too many people know that 12 out of every 100 tire valves in the world are made by the Taiwan-based Luhai Group, the world's largest maker of such product with factories in Taiwan, China (Xiamen and Kunshan), and Indonesia. But many people understand the safety-critical role these small devices play.

Luhai Industrial Corp., the flagship firm of the group, was established by six brothers of the Wu family. They worked hard to earn a little money from a small tire-valve processing factory operated by a relative.

After winning attention from some nearby tire makers, including the internationally reputed Cheng Shin Rubber Ind. Co. Ltd. and Kenda Rubber Ind. Co., Ltd., Luhai kicked off operations at a small industrial zone in Changhua, central Taiwan. Only two years after the company's establishment, some major Taiwanese tire makers were assessing the possibility of opening factories in China. Luhai decided to also set up a factory in Xiamen, Fujian Province of China, to directly serve its major customer Cheng Shin. In 1990, Luhai's first overseas production base in Xiamen kicked off operation.

Rapid Growth
Luhai rapidly grew between 1990 and 2008. During the period, the company's second Chinese factory in Kunshan, Jiangsu Province, was completed and promptly won quality-assurance certifications from Chinese certification bodies. The company was also certified as one of the top-100 rubber-parts makers in China. In addition, the firm's Xiamen facility passed the China Compulsory Certification (CCC) by the China Quality Certification Center (CQC).

Luhai made a key breakthrough in 2002, when the firm successfully tapped into the supply chain of international tire vendor Michelin's China operations and became the sole qualified Chinese tire-valve supplier to the firm at that time. The qualification as a Michelin supplier helped to open the door for Luhai to enter the international market. Since then, an increasing number of international tire makers in Europe, Latin America, the U.S. and the Middle East have placed big-ticket orders for the quality tire valves made by Luhai. Another international tire brand, Bridgestone, also chose Luhai as a qualified supplier.

Wu Chin-lu, chairman of Luhai, recalls that, in 2009, his company crossed another milestone with the founding of Luhai Holding Corp., which has launched a series of value-creating projects for the group. Through Luhai Holding, Luhai integrated its Chinese factories under the parent group. The move, along with a reputation for making quality and safe tire valves, has made Luhai the first choice of international tire brands.

Luhai supplies all types of quality tire valves for customers worldwide. (Photo from UDN)Luhai supplies all types of quality tire valves for customers worldwide. (Photo from UDN)

As Luhai's business in China matured, Wu saw new opportunities in the rapidly rising Association of Southeast Asian Nations (ASEAN) tire market, which had drawn intensive attention from global tire brands. Though Luhai had had plenty orders from customers in the region, the group decided to set up a new factory in Indonesia in 2011 and took back its regional agent right in the booming market.

In 2012, Luhai was picked as one of the "China Well-known Brands" by the Chinese government, further consolidating its leading position in the tire-valve business.

Wu realized that, to sustain growth, Luhai would need to discard its corporate image of a family-operated enterprise and go public. At the firm's 30th anniversary in late 2013, Wu announced that Luhai would make an initial public offering (IPO) to welcome in the next 30 years of the company.

Commitment and Mutual Trust
All the Wu's six brothers grew from a poor farming family in the rural area of central Taiwan. Over the past 10 years, Chairman Wu has taken only a fixed salary and poured all of the company earnings into overseas business expansion and equipment upgrading. As the head of the world's largest tire-valve supplier, however, Wu says that in addition to invaluable help from friends and customers, the most important factors for success are commitment and mutual trust.

"Luhai's top priority has been to never cheat our customers and to keep any promise we make. If we think a project is unfeasible, we will also honestly tell our customers," Wu says. "On the other hand, we have been constantly seeking to improve product quality and safety so our customers can have the utmost confidence in our products. The tire valve is a tiny part, but it is very critical to tire safety. The importance of this tiny item, in my viewpoint, is even higher than that of the entire automotive engine. A poor-quality tire valve will lead to flat tire, an extreme danger for running vehicles, especially at high speeds. The certification processes required by international tire makers for tire valves are complicated because tire makers have to shoulder all the responsibility when a safety problem occurs.

Expansion
Currently, Luhai operates two factories in Xiamen, one in Kunshan, and one in Indonesia. Together these plants can turn out 45 million sets of tire valves a year. In the third quarter of 2014, Luhai installed new manufacturing equipment at its factories in Xiamen and Kunshan. In the fourth quarter, four new machine sets will be installed at the group's Indonesian facility. In 2014, Luhai plans to invest about US$5 million to boost the group's global production capacity by 15.6% to about 52 million sets.

"The population in Indonesia now is close to 300 million, and domestic demand for automobiles and motorbikes is expected to rise in conjunction with rising incomes as increasing foreign investment creates jobs," Wu says. "Transportation vehicle demand in Indonesia is expected to enter a 20-year period of two-digit annual growth, like what we saw in China from 1990s."

Engineers and technicians at Luhai's modern and integrated tire-valve production line. (Photo from UDN)
Engineers and technicians at Luhai's modern and integrated tire-valve production line. (Photo from UDN)

Wu says that the decision to open a factory in Indonesia came only after intensive discussion at the management level. The move was aimed at directly serving customers in Indonesia and observing the development of this rising market. "We knew the decision was right," Wu says, "Since then, land costs in Indonesia have been steadily climbing."

Optimism
"We are very optimistic toward business development in the global market because the demand from new-tire installation and tire replacements for various types of transportation vehicles is always increasing. In short, there will always be demand for both original equipment (OE) and aftermarket (AM) tire valves," Wu says. "The bicycle and motorbike tire markets are relatively immune to the overall economic environment, so demand growth is expected to be higher than that in the four-wheel tire market. The rapid two-wheel sales expansion in major markets such as China and ASEAN will continue to follow rising incomes there, further driving up demand for tires and valves."

Wu sees strong potential in the ASEAN. In the Indonesian market, Luhai has won a market share of 95%, and the chairman hopes to gain similarly high share in another countries in the region. Luhai is also targeting at the tire-valve market in Vietnam, in which the group's market share is less than 3% now. However, Wu says, Luhai has been aggressively trying to tap into the supply chains of major Vietnamese tire makers to expand its business in the country.

 


Industry In-Focus

SINOSTEEL Corporation: Rising price in Steel</h2>

SINOSTEEL Corporation: Rising price in Steel

Jun 05, 2020

Brazil’s new crown pneumonia epidemic has rapidly increased. Brazil’s Vale, the world’s largest iron ore producer, is facing an out-of-control impact. The market is worried that iron ore production and sales will be affected. new highs. Experts from Sinosteel (2002) evaluated that steel prices will rise steadily under the effect of rising costs, with a promising outlook. According to a legal p...


Apple Invests Millions in LED Plant in Taiwan</h2>

Apple Invests Millions in LED Plant in Taiwan

Jun 01, 2020

Apple is considering to invest over US$330 million in a factory in northern Taiwan to manufacture both LED and micro-LED displays for its iPhones, iPads, MacBooks, and other new devices. Apple is teaming up on the new factory with Epistar, Taiwan's top LED producer, and Taiwanese LCD panel maker, AU Optronics. The plant will be located in the Longtan branch of the Hsinchu Science Park and Appl...


Taiwan Machinery Was Applauded in COVID-19</h2>

Taiwan Machinery Was Applauded in COVID-19

May 18, 2020

What the epidemic showed was the amazing flexibility of Taiwan's machine tool industry. Taiwan, which has allowed the semiconductor industry to specialize in the past, has finally realized that these machine tool industries with amazing strength are the "invisible champions" of Taiwan's economy. In early February, three companies -- Habor Precision, Tongtai Machine & Tool and Taiwan Takisawa -...



Industry Reports

K, the leading global plastic and rubber trade fair (Photo courtesy of Messe Düsseldorf/ctillmann)

K, The World's Leading Trade Fair for Plastic and Rubber Industry

Jul 24, 2020

2019 K Show, the leading global trade fair for the plastics and rubber industry, had been held in Düsseldorf on 16-23 October, 2019. There were 3,330 exhibitors from 63 nations proved impressively: plastics continue to be an innovative, indispensable material. But they also unanimously underscored the necessity of having operational circular economies along the complete material chain and to this...


Photo courtesy of CENS

Digital Healthcare & Technology at the Heart of Las Vegas CES 2020

Jul 14, 2020

■ Hubert Chih The number of healthcare exhibitors at the 2020 CES in Las Vegas increased significantly by 23% from 2019. According to the analysis and report by the CES organizer, digital healthcare and technology were the focus in the healthcare exhibition. In addition to the continued expansion of healthcare coverage, the reduction of healthcare costs, the improvement of effectiveness and th...


The Taiwan Hardware Show sees global buyer attendance. (Photo provided by Kaigo Co.)

Taiwan's Hand Tools Seeking Opportunities Amid Global Crisis

Jul 10, 2020

Due to the COVID-19 pandemic sweeping the globe, most of the international hardware shows slated for this year has been moved to 2021. However, as Taiwan’s efforts combating the new virus has proven to be successful, the 2020 Taiwan Hardware Show (THS) will continue as scheduled, beginning on Oct. 13 and ending on the 15th at the Taichung International Exhibition Center, thus becoming the only sh...



Supplier News

With professional technics and rigorous quality control, Kung Hsing gains high-reputation in the industry</h2>

With professional technics and rigorous quality control, Kung Hsing gains high-reputation in the industry

Jul 23, 2020

Kung Hsing Plastic Machinery Co., LTD., founded in 1972, is the brainchild of the company President Tsai Chin-lien’s over 48 years of experience in designing and producing extrusion machines. The firm stood by its belief to uphold integrity and offer the best quality and services, eventually becoming a leader in the extrusion machinery industry in Taiwan. Kung Hsing currently has two factories; t...

KUNG HSING PLASTIC MACHINERY CO., LTD.


INTYPE ENTERPRISE CO., LTD. TUNG TAI MACHINE WORKS CO., LTD. </h2>

INTYPE ENTERPRISE CO., LTD. TUNG TAI MACHINE WORKS CO., LTD.

Jul 21, 2020

■ Tseng Lung-nan Intype Enterprise has built up 55 years of experience in producing extruders, though the firm is placing greater consideration on rapidly degrading of the global environment. In the past 20 years, Intype has become an active contributor to building up a global ecosystem, enabling them to reuse the products manufactured by their own extruders and avoid further waste. The firm t...

INTYPE ENTERPRISE CO., LTD.


YFCM Carbon Fiber Driveshaft Lauded in the field of Modified Cars for its Flexibility </h2>

YFCM Carbon Fiber Driveshaft Lauded in the field of Modified Cars for its Flexibility

Jul 14, 2020

■Hsiao Yung-le Yifeng Technology Co., Ltd. specializes in the research and development of carbon fiber transmission shafts and the manufacture of carbon fiber related products.The carbon fiber material has the characteristics of lightweight, impact resistance, fatigue resistance, and corrosion, and chemical stability is quite high. The product type is increasing in the extensive range with an ...

YI FENG COMPOSITE MATERIAL TECHNOLOGY CO., LTD.



Insiders' Views

Caption: Pictured from front row, third right, Changhua County Government Economic Affairs Department Director Liu Yu-ping, County Magistrate Wang Huei-mei, Secretary Chen Bo-tsun pose in front of the exhibition booth. (Photo provided by CHCIA)

Changhua County Government Shores up Biz-Matching to Global Buyers

Nov 18, 2019

■Yang Feng-Chun In a bid to assist manufacturers in Changhua County to expand their market reach overseas against severe competition in the globalized market, Changhua County Government has been an active player in pushing for a makeover and innovation of its local small and medium-sized enterprises. This is done in hopes of establishing stronger connection with international markets. An ex...


Paul Master offers high-quality chassis and engines parts for passenger cars, trucks, and industrial trucks. (Photo courtesy of Paul Master)

Paul Master Builds Reputation with Auto Chassis and Engine Parts

Nov 18, 2019

Founded in 1980, Paul Master Auto Parts Co. is headquartered in Taiwan, a professional manufacturer of chassis and engines parts for passenger cars, trucks, and industrial trucks including forklifts. General Manager Terry Liang said the company has its own professional design department, which provides customized products and specifications for global buyers, including automobile steering and...

PAUL MASTER AUTO PARTS CO.


Nan Hoang Traffic Instrument Co., Ltd.</h2><p class='subtitle'>Taiwan First brakes Technology Co., Ltd. </p>

Nan Hoang Traffic Instrument Co., Ltd.

Taiwan First brakes Technology Co., Ltd.

Sep 04, 2019

Nan Hoang Traffic Instrument Co., Ltd is one of the major manufacturers of automobile friction materials in Taiwan and globally. Chairman Austin Cheng has implemented the double-arrow strategy this year - own brand of “YangPo” is adopted to focus on global channels while the “NHC brand focuses on improving market shares in global markets, such as Europe, America, Asia, Australia, and the Middle E...



Exhibition Highlights

Koelnmesse (Beijing) Co., Ltd.

Announcement on Postponement of China International Hardware Show 2020 (CIHS 2020)

Jul 10, 2020

In view of the continuous spreading of COVID-19 all over the world and the latest epidemic prevention requirements of China and the government of Shanghai, in order to guarantee the health and safety of exhibitors, purchasers and professional visitors, China National Hardware Association and Koelnmesse have prudently decided to postpone China International Hardware Show 2020 (CIHS 2020) from Augu...


Automechanika Shanghai 2020 creates channels for cross-sector collaboration</h2>

Automechanika Shanghai 2020 creates channels for cross-sector collaboration

Jun 16, 2020

This year, Automechanika Shanghai continues to serve the entire automotive value chain by offering opportunities for information exchange, marketing, trade and education. Both vertically and horizontally, from OE, vehicle production to the aftermarket, it incorporates all elements of manufacturing, supply networks, services, new business models and information technology. Companies across the...


Messe Frankfurt (Shanghai) Co Ltd

CAPAS defers to 2021

Apr 20, 2020

Following the Chinese Government’s initiatives to prevent and control the COVID-19 outbreak, the organisers of the Chengdu International Trade Fair for Automotive Parts and Aftermarket Services (CAPAS) have announced the defer of the show’s 2020 edition. The fair, originally scheduled from 21 to 23 May 2020, will now be held from 20 to 22 May 2021. In China, the State Council issued an announc...