Packaging Machinery Makers Challenged by Fierce Underselling

After over half a century of development, Taiwan's packaging machinery industry has succeeded in going global by offering innovative products, and many local manufacturers have been working with foreign customers to develop custom-designed machines with multi-functionality.

Still, some leading manufacturers are asking for technical assistance from the government as they, mostly medium and small in size, are having difficulty trying to access sophisticated manufacturing technologies from industrialized nations to upgrade production.

Meanwhile domestic manufacturers are challenged by intense price competition from developing nations, and are focusing on developing precision machines to process green materials as a counter strategy.

With surging prices of raw materials, domestic packaging-machinery industry has to cut costs to stay competitive globally because manufacturers claim they can't effectively pass on rising production costs onto customers amid tough competition.

Demand for Delicate Packaging

Lin Kuo-hung, chairman of the China (Taipei) Packaging Association (CTPA), says as world demand for machinery suitable for making delicate packaging increases, domestic manufacturers have to develop machines capable of sophistication, automation and multi-functionality. "In addition, the manufacturers have to improve management and elevate core manufacturing skill to stand out in the highly-competitive world market," Lin notes.

An industry insider says that the domestic market for packaging machinery has been slowing, forcing manufacturers to look at emerging markets as Vietnam and China. Nevertheless, the manufacturers still face intense competition from China who have been successful to strengthen their capability over the past several years.

For instance, the price for a single-function sealing and packaging machine is quoted at less than 1,000 renminbi per unit in China, close to the production price in Taiwan.

To help domestic manufacturers survive globally, the CTPA urges bigger manufacturers to work with smaller ones to integrate resources to achieve success worldwide.

Shrink Packaging Solutions

Benison & Co., Ltd., founded in 1962, is a leading manufacturer of shrink materials and related machines in Taiwan, who has been focusing on developing innovative products aimed at upper market segments worldwide.

The company says it is the island's largest supplier of PVC/PP/PE (polyvinyl chloride/polypropylene/polyethylene) heat-shrinkable films and machines for making such materials for the past six years, supplying at least half of Taiwan's overall output.

In order to smooth its way into the harsh international market, the ISO9001 and CE certified manufacturer plans to ally with equipment suppliers both at home and abroad. "In Taiwan, we plan to contract manufacturers to supply specialty models; while we plan to supply to major producers internationally," company general manager Benker Liao explains.

Threats from Newcomers

Benison has targeted several potential markets outside Taiwan and China, but Liao declines to specify which markets for fear of copycatting by local rivals. Underselling threats by newcomers in existing markets is another reason for diversifying into new territory.

Cultivating international trade specialists is also a major global marketing strategy, with which it will not promote its "Benison" brand in markets where it is an OEM/ODM (original equipment/design manufacturer). Rather, it will focus branded sales in Taiwan and emerging economies like China and SE Asia.

Benison is a contract supplier to several Japanese companies and is now in talks with some big players over OEM deals.

The company believes that the shrink packaging machinery industry has significantly helped to improve the outer appearance of many products, and it also listens to customers' suggestions to develop specific shrink packaging solutions.

Benison's products are mainly designed to make films ranging in width from 6mm to 1,000mm to wrap and package food, medication, electronic equipment, hardware, toys etc.

Benison is developing green packaging materials that are recyclable and bio-degradable. In terms of packaging machinery, the company focuses on developing customizable machines that can produce light and thin packaging materials.

Independent Development

Despite the efforts made by domestic packaging machinery industry over the past several years, Liao thinks domestic manufacturers have received little technical help from the outside. "Domestic manufacturers have always had to work independently in R&D to build innovative machines without technical assistance from the government," Liao laments. "Although Taiwan is still one of the world's most important production centers for packaging machinery, many from developing nations are catching up. Without receiving official assistance to cultivate expertise and R&D capacities, we will lose ground to developing nations someday in the foreseeable future."

Packaging Materials & Machinery

Founded in 1980, Allen Plastic Industries Co., Ltd. is a specialized maker of plastic materials and related machinery in Taiwan, as well as known for long-term dedication to developing innovative packaging materials in Taiwan.

The company has been focusing on the production of high-quality products for reasonable prices, which has enabled the firm to build a solid reputation at home and abroad.

The company's major product lines include PVC (polyvinyl chloride)/ polyolefin shrink films, PVC colorful shrink labels, PVC shrink tubing, OPP (oriented polypropylene) labels, PVC films/sheets, PET (polyethylene terephthalate) foils, poly bags, packaging machinery and film/tube extruding equipment.

With 50 workers, the company has a monthly capacity of 200 tons of packaging materials and several units of machinery.

Backed by long-term R&D, the company has achieved 15% to 20% annual growth in sales over the past three years, and says such growth will rise to over 20% this year with increasing world demand.

With a factory in Kaohsiung County, southern Taiwan, the maker will begin building a new 2,450-square-meter factory nearby to meet rising export demand.

The company is also a frequent exhibitor at well-established international plastics and rubber, and packaging shows.

Servo Packaging Machinery

Hersonber Industrial Co., Ltd. has been in the packaging machinery business since 1979, with almost thirty years of experience in the design and manufacture of horizontal servo flow wrapping machines.

Specializing in the design and production of packaging equipment and systems, Hersonber says its products can compete with world-famous brands in quality, and their prices are only half of those of European counterparts.

Lin Ching-yang, president of Hersonber, notes his company has expertise in designing and manufacturing machines for flexible packages, offering fully automated lines.

Hersonber's horizontal flow wrapping machines are designed for continuous packaging of solid products in pillow packs, starting from flat sheet rolls, and can use all types of heat and cold seal films as well as all types of polyethylene.

Multi-pack Functionality

Hersonber's machines feature medium- and high-speed operations for single product and multi-pack packaging of food, pastry and confectionery, suitable for use by the chemical and pharmaceutical industries, spare-parts manufacturers, and plastics, cosmetics, toys and gift industries.

The company has so far developed more than 40 models of machinery, including flow wrap, vertical fill, form seal packaging machines, all of which can work with various automatic feed systems, with specific options available to customers.

With an in-house R&D team, Hersonber says it can design made-to-order machines and production lines.

The company exports 85% of output mainly to industrialized nations, claiming it has exported products to 42 nations so far.

Zipper Bag Side Sealing & Cutting Machines

S-DAI Industrial Co., Ltd., established in 1978, specializes in making machines for producing packaging for garment, stationery and flower, focusing on easy-operation models and niche models such as machines for cutting printed-circuit boards, says general manager Jiang Jyh-long.

After focusing on machines for making garment bags for years, Jiang says, with domestic manufacturers of such machines having moved offshore over the past decade along with the island's garment manufacturers, those who remained in Taiwan have had to find new markets.

Among the niche markets to first be explored by S-DAI are the flower-shape bag- and stationery-packaging machinery markets, both of which have grown steadily over the years to help the company offset dwindling sales in the garment-package machine segment.

Over the past few years, S-DAI has introduced computerized models that automatically handle precision adjustment of bag dimensions. "Computerized models are 30% more efficient than manual types," Jiang says. "Our automated machines can turn out 120 to 150 30x 30cm bags a minute. All the software for the company's machines is developed by in-house engineers and contracted programmers."

30% Price Advantage

Jiang says that his company has a 30% price advantage over Japanese and German suppliers while rivaling them in quality, a feat attributable to Taiwan's well-developed electronics industry. "Many Japanese and German stationery manufacturers and florists now prefer our machines to those locally supplied," he states.

According to Jiang, success in the stationery and floral-shaped bag packaging machine markets depends on the ability of suppliers to meet customer demands for models that are attractive, precise, efficient, and quiet. All of the components used in S-DAI's machines are locally sourced, except for the servomotors, which are imported from Japan.

S-DAI has a monthly production capacity of 25 machines, most of which go to mainland China, Southeast Asia, and India. The company also expects to boost shipments to Europe soon, while it is trying to bring its machinery circuitry to meet the CE standard

Printed circuit board cutting machines are another revenue earner for S-DAI. According to Jiang, the company has captured 80% of the specialty market. "This machine is very efficient and only a few units are needed for operators to turn out huge volumes of printed-circuit-boards," he explains.