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Taiwanese Fasteners Suppliers Make Most of Advantages in Global Market

By Steve Chuang , 2012-04-16 12:00:00

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After more than six decades of development, fastener manufacturing has evolved into one of Taiwan’s few traditional industries that enjoy sustained global competitiveness. Having upgraded from low-end, DIY-caliber fasteners to the higher end of the line, Taiwanese fasteners suppliers increasingly find their niches in the global supply chains of automotive manufacturers.

Statistics compiled by the Taiwan Industrial Fasteners Institute (TIFI) show that despite the global economic sluggishness, Taiwan’s fastener industry recorded a record high output of more than NT$140 billion in 2011, with exports of US$3.97 billion representing an 11.14% growth to an all-time high. This makes Taiwan one of the world’s top suppliers of fasteners, with over one-sixth of the total market. The five biggest export markets are the U.S., Germany, the Netherlands, Japan, and the U.K.

Fasteners for automotive use have been the industry’s major growth engine in recent years. This is a segment that requires advanced technological specifications and manufacturing capabilities, so it is increasingly seen as a category that will enable producers to withstand underselling by emerging rivals.

Chun Yu

The Chun Yu Works & Co., which was founded in Taiwan’s southern port city of Kaohsiung in 1949, is one of the island’s oldest manufacturers in the line. It is also the only domestic fastener maker to be certified by IRIS (International Railway Industry Standard), and as such has supplied railway fasteners to Taiwan’s High Speed Railway Corp. and Japan’s Shinkansen on an OEM (original equipment manufacturing) basis.
 
Arthur Wu, manager of Chun Yu’s Fastener Export Division, said that years ago his company expanded its business scope to encompass a variety of auto fasteners, including weld bolts, flange screws, press screws, hex bolts, wheel hub bolts, and fasteners with customized specifications. “Chun Yu is Taiwan’s first fastener maker to be certified by TS16949 standards,” says Wu. “That happened in 2003, and today over one third of our products are delivered to carmakers and related subcontractors all around the world. Large international carmakers like PSA, Honda, Daewoo, and Yulon are among our customers.”

Much of the company’s current success is attributable to the constant improvement of its manufacturing capabilities. Despite the uncertainties of the global economy, Wu said, his company decided to invest more than ever in upgrading its production equipment and technology in 2011. The investment has paid off, effectively shortening the time needed for prototyping and making Chun Yu one of only a few Taiwanese manufacturers capable of turning out cold-forged auto fasteners with a maximum diameter size of M30.
 
The company’s competitiveness is given an extra boost by the possession of a world-caliber QC lab accredited by A2LA (American Association for Laboratory Accreditation). Wu said that with the lab, in which a full line of state-of-the-art inspection instrument is used and by-the-book standards strictly carried out, his company can independently handle almost all of the ordinary and special testing needed for auto fasteners, thus guaranteeing the quality of its products.
The company remains confident that its auto-fastener business will continue its upward trend this year, partly because of efforts to hone its competitive edge and partly because of a stable market in the U.S. Wu pointed out that while the European market for auto fasteners slowed significantly in the fourth quarter of 2011 and the first quarter of 2012 due to the mounting debt crisis, the U.S. market continued its steady recovery from doldrums of 2009. This, along with the Chinese market, will help keep his company surging ahead.

Wu reported that this year his company has stepped up the development of fasteners for heavy-duty vehicles such as trucks and agricultural vehicles, which are subject to stricter quality requirements but usually generate higher margins than fasteners for ordinary passenger sedans. Buoyed by robust shipments of auto fasteners, the company expects its sales revenue to soar a 20% in 2012.
 
Ho Hong
 
The Ho Hong Works Co. is one of Taiwan’s high-profile fastener manufacturers with an impressive presence in the global automotive supply chain.
Ever since its inception in 1973 in Kaohsiung, Ho Hong has specialized in making hex bolts, screws, and pins of diverse sizes and specifications. Company chairman Joe Chen, who doubles as chairman of the Taiwan Industrial Fasteners Institute (TIFI), firmly believes that auto fasteners are one of the best options for the industry to espouse in competing against price-slashing rivals. The company has been making auto fasteners for a long time, steadily building up a solid reputation among professional buyers worldwide.
 
The assurance of finished products with good quality consistency, partly the result of an integrated in-house production capability, is the key to the company’s success. Evan Chen, supervisor of the company’s sales department, pointed to the auto fasteners that Ho Hong debuted at the Taiwan International Fastener Show 2012 on Mar. 13-14 in Kaohsiung and said that they were all produced on the company’s integrated production lines. These lines carry out all production processes, from pickling, wire drawing, and die tooling to manufacturing, heat treatment, sorting, and packaging.
 
The company has put heavy emphasis on quality control policies, such as implementation of the PPAP (Production Part Approval Process), a requirement that is widely used in the auto industry to measure the consistency of quality characteristics. The veteran maker has also established, as Chun Yu has, an A2LA-accredited QC lab at its 180,000-square-feet factory to guarantee unbeatable quality. This strong commitment to quality, Chen said, has helped the company keep its manufacturing and product defect rates under 0.2% over the past decades, a notable achievement that only a few peers can match.

Ho Hong has used constant product upgrading to boost its profile, for example joining forces with the China Steel Corp., Taiwan’s largest steelmaker, to develop proactive manufacturing technologies and higher-grade materials in 2009. This cooperation, Chen said, has proven effective in strengthening the company’s competitive edge and attracting new customers.

With an annual production capacity of around 20,000 metric tons, Ho Hong, which enjoys ISO 9001 and TS16949 certification, has won a good reputation among clients around the world, especially in the U.S. and Japan. Chen said that over 35% and 60% of his company’s fasteners go to those two countries.

Taiwan Self-Locking Fastener Group

The Taiwan Self-Locking Fastener Group (TSLG) began producing pre-applied adhesives and sealants for fastener manufacturers from its plant in the northern Taiwan county of Taoyuan in 1984. The company is noted for its cutting-edge pre-coating technology.

Rainey Chang, TSLG’s sales chief, noted that his company’s advanced pre-coating technology performs six functions for fasteners: thread locking, sealing, protection, masking, lubrication, and over-tightening protection. Drawing on this technology, the company has developed Nylok, Precote, 3M, and Loctite adhesives and sealants for a variety of industrial fasteners. The company’s technologies and fasteners have been certificated and adopted by NASA and major international carmakers.
Precote, Chang explained, is a microencapsulated pre-applied chemical adhesive, available in several strength grades, that is suitable for all metallic fasteners. A liquid plastic material and hardener are encapsulated in a thin polymer film; when the film is applied to a bolt, the two kinds of capsules will burst under pressure and friction, and provide the required thread locking.

Chang emphasized that fasteners with Precote applied have no need for additional locking devices, allowing users to increase productivity on their assembly lines. The fasteners measure up to the IFI-125, IFI525, and other standards required by most carmakers. With a try-to-touch, non-tacky finish, the fasteners are impervious to atmospheric conditions and humidity, and are friendly and non-toxic to assemblers.
Chang went on to say that his company’s Nycote series, consisting of a non-conductive Teflon PFA powder coating applied to threaded fasteners for thread masking and protection, is also highly popular with fastener manufacturers. The patented Nycote process provides guaranteed protection against thread contamination by electrodeposited paints, primers, and weld spatter, which can compromise quality and safety. This coating technology, and fasteners that employ it, have been approved by top carmakers including GM, Ford, Chrysler, BMW, and Mercedes-Benz.

With five plants operating in Taiwan and China, TSLG today is a globally reputed supplier of professional pre-coating services for local fastener manufacturers. The company’s products and technologies, Chang said, help customers to move upmarket and earn bigger profits.
 

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