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Taiwan to Help Shift Product Offering by Exporters to Boost Sales

Aug 18, 2015 | By Ken Liu

The Taiwan Cabinet or executive ministry, has plans to boost the island's export value by structurally changing product offering, mainly through helping local manufacturers export total or turnkey solutions or systems instead of key components or individual products, with developing economies such as Southeast Asia and Latin Americas set to be the primary markets initially.

Premier Mao Chi-kuo announced that he expects to see results from the project in a year.

The new plan seems intuitive as it adopts an age-old business formula to sell the works rather than a single part. The total solution or system defined in the export project is an integration of software, equipment and components as a package. Mao points out that suppliers of individual items like a bicycle or a screw make only meager profit.

The Ministry of Economic Affairs (MOEA), which is the prime executor of the policy, has chosen 10 categories of key systems, namely electronic toll collection system, green-energy transportation system, smart logistics system, smart healthcare system, smart school system, digital government, light emitting diode (LED) lighting system, cloud computing system, petrochemical and solar energy, whose collective market is projected at around US$318.2 billion worldwide a year.

The Premier has asked the ministry to build a platform in cooperation with other governmental organizations to assist the private sector to set up test beds for their system products. To complement the new plan, governmental organizations may consider designating domestically-built system products for procurement in major contracts.

The platform is also required to work with Taiwan's trade and economic offices overseas to market the island's system products.

The Premier has also instructed the Export-Import Bank of Republic of China, a Taiwan government-owned bank specifically tasked to offer loans to the island's exporters and importers, to set up a loan platform with other government-run banks to make financing easier than before.

The loan platform will raise at least NT$20 billion (US$645.16 million) based on current loan regulations for exports of machinery equipment and clean-energy equipment.

As instructed by the Premier, the MOEA will set up office to push the system-product export program, according to Director General M.J. Wu of MOEA's Industrial Development Bureau, who adds that the MOEA will work with the Ministry of Finance (MOF) to implement the loan platform by recommending to the MOF outstanding exporters as borrowers.

Wu says the MOEA will help manufacturers form alliances to promote flagship products on the international market.

However, Wu concedes that the hardest part for Taiwan to market on the global market its turnkey products is low recognition of Taiwan's system brands although Taiwan has developed excellent technologies and manufacturing services. Besides, local manufacturers are not knowledgeable about international rules for contract bidding nor global marketing.

At present, smart school system and e-Tag toll-collection system are the only two of the above-mentioned 10 selected systems that have been commercially available overseas.

The island has shipped the Internet-based smart school system to Vietnam, whose government is planning to install the system in 300 schools across the nation. In addition, Taiwan's clean-energy and network-connectivity industries are also expected to benefit from the Vietnamese government's plan.

Industry executives point out that the island's e-Tag collection system is high quality yet inexpensive. Its superior function and scalability allow it to be applied to vehicle record management, emigration/immigration management, parking-fee collection management, traffic volume analysis, and security system.

The global market for electronic toll collection systems is projected at US$17.5 billion by 2020, MOEA officials say.


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