Sign In  |  Join Free  |  Contact |  Help

Home > News > Industry Activities > Taiwanese Fastener Makers Buckle Down Against Competitors

Taiwanese Fastener Makers Buckle Down Against Competitors

By , 2008-03-08 12:00:00

Share to:


 At a forum last year in South Korea, Bruce Sun, chairman of the Taiwan Industrial Fastener Institute (TIFI) attempted to convince his counterpart from mainland China to end the bloodletting competition between the fastener industries of the two sides. His appeal was unsuccessful, making him cautious about the outlook of the fastener business in Taiwan.

The mainland dethroned Taiwan as the world`s No.1 industrial-fastener supplier in 2005, when its low-priced exports surged ahead of Taiwan`s 1.25 million metric tons. Exports account for over 80% of Taiwan`s fastener production, while China sells only around 40% of its output in the segment abroad.


Sun, whose institute represents nearly 500 of around 2,000 Taiwanese fastener manufacturers, said he tried very hard to persuade the mainland Chinese representatives not to dump their products in international market.

"They simply shrugged and said the problem is beyond their ability to fix because the mainland producers can access a huge supply of domestically made steel at essentially low production cost," Sun laments. The mainland`s fastener manufacturers sell their products at an average price of US$1.1 per kilogram in international markets, compared with Taiwan`s US$1.96-1.97 per kilogram. Japan`s products average US$3.8 while South Korean manufacturers set their products at US$2.4-2.5.

Moving On Up
Conceding China the cost advantage, Sun suggests that Taiwan fastener makers turn their focus to high-performance products. "It will take some time for China to catch up with us because most of their products are low-end types," he says.

The Taiwan industry has begun upgrading products in many ways. Sun`s association is working with China Steel Corp. (CSC), currently Taiwan`s No.1 steelmaker, to develop high-end alloy and high-carbon steel for fasteners. CSC, Sun notes, has promised to increase output of high-carbon rods and high-end alloy rods to 13% of its total output capacity from current 10% to meet the demand of the island`s fastener industry.

The government-backed Metal Industries Research & Development Center (MIRDC) is also helping Sun`s industry develop mold tooling, materials, and processing methodologies for making high-end fasteners. Also, the organization is working with other government-backed institutions to jointly build up certification capability.

In addition, five fastener-related product suppliers including Sun`s company, fastener-equipment supplier Chun Yu Works & Co., Ltd., have entered into alliance to develop fasteners for aircrafts. The five manufacturers have won certifications on their aircraft-use fasteners and joined the supply chain of a military offset program between Taiwan and the United States.

Sun points out that the aircraft-fastener alliance will collectively tap overseas markets and begin with markets outside the United States and Europe. "Mainland China will be our first market before winning orders from the States and Europe," he says.

Many Taiwanese manufacturers have diversified into fasteners for cars. The mainland, Sun cautions, has an advantage over Taiwan in the car fastener market, although Taiwan still has the quality edge. "The mainland`s car market is much bigger than ours, offering fastener manufacturers there a good environment to grow. Besides, foreign carmakers have helped foster the mainland`s car industry by opening joint ventures there," the chairman says. The mainland`s sedan-car market, he adds, has grown at the rate of one million vehicles in each of the past few years.

Even South Korea, Sun adds, is ahead of Taiwan in developing car-used fasteners, thanks to its bigger auto market. "South Korea now exports cars while Taiwan`s car industry remains an infant under the government`s long-time protection policy," he says. Korea, according to Sun, has emerged as another formidable competitor to Taiwan in the world fastener market with its more aggressive exports in recent times. "At the 2006 Las Vegas hardware show, South Korean manufacturers occupied 20 of the 500 booths, far outnumbering Taiwan`s showing," he recalls.

Although most Taiwanese suppliers of car fasteners are qualified, Sun worries that they face a number of hurdles. "Foreign carmakers hope Taiwanese suppliers can open warehouses near them, but established fastener suppliers in their countries tend to make it difficult for newcomers to get a foothold," Sun says. However, his company has opened a production base in the U.S.

Opportunity in China
While China poses a severe threat to Taiwan in the world fastener market, it also represents a lucrative market. According to Sun, around 500 to 600 Taiwanese fastener manufacturers have opened manufacturing facilities in the mainland to tap the growing domestic demand there. "There is vast demand in China for fasteners due to the booming housing, car, and commodity markets there. Taiwanese transplant factories initially moved to China to reduce costs, but now market factors are the main driving forces," Sun says.

Sun expects that Taiwan`s production of high-end fasteners will increase sharply over the next few years from the current 10% of the industry`s total output. The shift upmarket, he notes, has prompted many domestic equipment suppliers to develop more efficient machines. "Currently, machines doing five-stage punches with five molds are now the most common models supplied by local equipment suppliers. Chun Yu even supplies machines doing seven-stage punches with seven molds," Sun says, adding that machines with higher mold numbers can produce higher precision fasteners.

Quality improvement has also stimulated demand for mold-tooling software, Sun says. "When domestic fastener manufacturers still made low-end products several years ago, they counted on molds built by veteran workers. Now, they use software to calculate required elements," Sun notes.

All of these improvements, Sun concludes, are helping Taiwanese manufacturers to move to higher ground ahead of the rising tide of mainland competition. (Jan. 2007)

Remark on News

Overall Rating0 reviews

  • 0 People
  • 0 People
  • 0 People
  • 0 People
  • 0 People

Evaluate the Details

Overall Rating:
Click the stars of the show rated
logo

Free Submit for Publication

Fastener News,Import & Export Statistics Reports,Industrial Actives,Exhibition,Forum etc.are welcome

word,image,excel,txt,pdf,rar,zip only