Metal Household and Bathroom Item Makers in Taiwan Rely on Basics
2008/11/14 | By Judy LiTaiwan's mature stainless steel sector and advanced electroplating technology have held up manufacturers of kitchenware and bathroom hardware in Taiwan, helping them to not only weather downturns but also prosper, with a handful in Taiwan having even established private brands and become global giants.
Likely more a strategy of necessity than savvy target marketing, Taiwan's manufacturers of kitchenware and bathroom fixtures have been increasingly focusing on designing, building high-end products for both domestic and overseas markets. With steadily rising affluence worldwide, including in emerging nations as Russia and India, kitchenware and bathroom fixtures, generally regarded as utilitarian, are gradually being taken upmarket to fit in with interior decors demanded by top-end consumers and commercial applications as in boutique hotels and resorts.
Leader of Faucets in Asia
Founded in 1979 in Taichung, central Taiwan, Globe Union Industrial Corp. started as a trader of building materials and later on evolved into manufacturing bathroom equipment, mainly faucets, fixtures and accessories. Today the company is the largest manufacturer of faucets and related products in Asia and the fourth largest of its kind globally.
Some 27 years ago, Scott Ouyoung, chairman of Globe Union, started up with NT$2 million (about US$60,000-70,000) as a bathroom hardware trader. With frequent contacts with local faucet makers, Ouyoung naturally was also inspired to follow in their footsteps. Finally turning inspiration into reality in 1985, Scott set up in-house production lines in his trading firm, mainly turning out brass faucets, bathroom accessories, and showerheads.
Having sold products to mostly the United States and Canada for a long time, Globe Union became North American certified in the 1980s. The firm exports to more than 30 countries, including the United Kingdom, Germany, Italy, Mexico and China. Last year the corporate revenues reached more than NT$20 billion (US$645.16 million at US$1 = NT$31).
Private Branding
Shortly after beginning to make bathroom ware in 1985, Globe Union set up its own "GOBO" brand in 1994, adding "Danze" later. In 2003, the company merged with a well-known American bathroom fixture maker-Gerber, and a year later purchased "Lenz," a reputable German maker of bathroom hardware. Globe Union's M&A strategy not only enlarged its brand portfolio, but also opened the door to the bathroom hardware markets in the U.S. and Europe.
Ouyoung emphasizes that the company will keep developing more brands because branding adds value to products and wins customer loyalty. Globe Union has some 13 brands marketed worldwide: "Gerber" and "Danze" are quite popular in North America, "Lenz" is well-known in Europe, while "GOBO" is big in Asia, and "AEB" famous in South America.
Disclosing that "Danze" helped to bring in profits exceeding US$7 million last year, Ouyoung says the company's revenue goal for the brand is US$210 million for 2010, with projected profitability of 15%.
China-bound Expansion
Globe Union has actively expanded production into China since 1993. Its China plants initially turned out mostly faucets and then gradually diversified into sanitary equipment. The past 15 years have seen the company invest more than NT$2.7 billion (US$87.1 million) in China, where it runs three plants each in Shenzhen of Guangdong Province and Qingdao of Shangdong Province.
In the next three years, Globe Union aims to invest an additional NT$1.1 billion (US$35.48 million) in its China production bases to meet the rapidly growing market, where its brands "Boutique," "GOBO," and "Milim" have been thriving. China is expected to grow into the company's fastest growing market in the near future and revenues there is estimated to reach NT$6.1 billion (US$196.77 million) by 2012, about 15% of the company's total.
Being true to its motto to deliver quality goods by enhancing manufacturing technology, Globe Union became ISO 9002 certified in 1995, and ISO 9001 approved in 1997, as well as meeting many other international standards. The company has also won numerous awards and honors from the authorities in both Taiwan and China.
Innovative Metal Houseware Maker
Established in 1992, Her Shin Di Industry Co. specializes in making a variety of stainless-steel household items. Choosing to stay in Taiwan, unlike many of its peers who have gone to China, the company is in Changhua, central Taiwan, and conveniently among a cluster of metal product manufacturers and machine tool makers. The easy access to satellite plants has enabled Her Shin Di to steadily grow over the years.
Insisting on an ongoing program of innovation, fair management, and operating efficiency, the company has successfully sailed through the rough times in the past 15 years to stay strong. Backed by a skilled R&D team and advanced manufacturing technologies, the company offers a wide variety of quality, metal bathroom and kitchen items, such as toilet brush stands, umbrella stands, trash cans, paper towel holders, hampers, storage racks, towel racks, toothbrush holders etc.
"We make mostly stainless steel products with top-grade electroplating and coating," says M.H. Ting, general manager of the company. "We export more than 90% of our output through traders worldwide and sell the remaining in Taiwan." The company's major export outlets include the United States, Japan, Germany, India, South Korea, and the Middle East.
During its heyday, Her Shin Di had over 50 workers, but only about 30 persons today. "Taiwan's kitchenware and bathroom hardware sectors, for five or six years, have been undermined by the growing competition from China, and severely impacted by soaring metal prices recently," Ting laments. "About three years ago the price of steel jumped 50%-80%, although receding a little a few months ago. It has been tough going over the past couple years with thinning profits."
Ting believes hard work and steady introduction of innovative products sum up his survival tactic. "The one who can ride out difficulties and solve problems is likely to weather even hard times, while the one who does not may flop even in a boom," Ting remarks.
Automated Maker of Metal Household Items
Founded in 1979, Henn-Yi Hardware Co., Ltd. is a highly mechanized maker of metal household items, mainly trash cans, dust bins, hampers, and bathroom accessories. "Henn-Yi is a modest manufacturer with about 20 staffers, which is sensible for we rely on highly automated production," notes H.M. Chen, sales manager.
"Initially we only made simple metal items and accessories for the domestic market. Not until 1985 did we start to manufacture kitchenware and bathroom items when we purchased advanced machines to upgrade production," Chen states. "In 1995, we further diversified production, turning out also wall shelving, drawer shelving, and clothing racks."
Henn-Yi has built wide-ranging popularity among buyers by delivering top quality. "We export 90% of our output and sell the remaining 10% domestically. Our major export outlets are in Europe, North America, Central & South Americas, and Australia," Chen adds. "In recent years, mainland Chinese rivals have been aggressively making inroads into the world market with lower prices." Besides, the global economic downturn is also impacting the bottom-line, with the company predicting to see a 40% drop in revenues this year.
Undeterred by the global economic fallout and rising competition from China, Henn-Yi keeps upgrading facilities and emphasizing R&D. "We are committed to developing more innovative, high-end products and offering the best service to customers," Chen affirms. "We are confident in our ability to weather through the rough times to remain strong in the global market."