Wood Technology Club Elects First Taiwanese Chairman

Bill Hung, chairman of the Taiwan Woodworking Machinery Association (TWMA), was elected the second president of the Wood Technology Club (WTC) last August. His election reflects Taiwan's status as the world's third-largest supplier of woodworking machines, after Germany and Italy, with annual revenues of at least NT$40 billion (US$1.25 billion at NT$32:US$1).

Hung won out over an Argentine challenger to take over the position from the WTC's first president, Lazzaro Cremona of Italy. Cremona was chosen in 2001, when the WTC was founded by the 53-member European Federation of Woodworking Machinery Manufacturers (Eumabois).

The TWMA, which, Hung reports, "has long been a partner of Eumabois in arranging trade shows," has a membership of around 300.

His new post gives Hung the right to decide where to hold the WTC's annual conference, preside over meetings to discuss the location of trade shows, and coordinate between members involved in counterfeiting and other disputes.

"Most importantly," Hung adds, "the position will make it easier to introduce advanced woodworking technologies and market information into Taiwan." He is thinking about holding the organization's 2005 conference in Taiwan during the biennial Taipei International Woodworking Show this summer.

"The holding of the conference here will make our show more internationalized and prominent than ever before," Hung comments. Even without the conference the show would be highly internationalized this year, since many of Eumabois' heavyweight members have pledged to display their products at the Taiwan show, he adds.

This participation will be important, because Taiwan's makers of woodworking machinery have an urgent need to develop new markets in the face of numerous difficulties. Those difficulties, Hung says, include mainland China's macroeconomic control measures and rising competition from Chinese manufacturers. The mainland's economic cooling measures have dealt a heavy blow to the real estate industry there, and the shrinkage of that industry will badly hurt a wide variety of other industries, including furniture manufacturing. This is significant, Hung points out, because Taiwanese woodworking equipment suppliers depend on the mainland for at least 40% of their business.

Hung expects the Chinese market to become more open to imported equipment, especially with a further reduction of the import tariff this year from the current 10%. "Although the import tax reduction fulfills a WTO (World Trade Organization) commitment," Hung comments, "it also suggests that the mainland authorities have become more confident in the ability of their products to compete with imports."

With their price-undercutting tactics, Hung laments, mainland Chinese equipment suppliers pose a serious threat to their Taiwanese counterparts in major world markets, notably Southeast Asia, the United States, and Western Europe. This has caused many buyers who procured Taiwan-made machinery in the past to switch their sourcing to the mainland because of lower prices there. As a result, Hung urges, "We must tap new markets, especially in emerging economies like those of the former Warsaw Pact states, Latin America, and some African countries. Japan is another good target."

Over the past two years Taiwanese suppliers of furniture-making equipment have opened production facilities in Vietnam in order to be closer to their customers, as more and more wooden furniture manufacturers, from both Taiwan and mainland China, have moved production to Southeast Asia following the U.S. imposition of anti-dumping taxes on furniture from China.

However, there are still a lot of problems that face operators in Vietnam. "The foremost problem, Hung explains, "is a shortage of technology personnel. Other problems include a weak infrastructure, poorly educated workers, and the language gap."

The shortage of technology workers in Vietnam has prompted foreign manufacturers there to poach from one another, with the ultimate result of hiking worker salaries.

Like many of its Taiwanese counterparts, Hung's own firm, Boarke Machine Co., has opened a warehouse and sales office—but no production facilities—in Vietnam. The company moved its product focus from China back to Taiwan following the imposition of macroeconomic control measures by the Chinese authorities.