TAMI Celebrates 60th Anniversary

On Nov. 11, 2005, the Taiwan Association of Machinery Industry (TAMI), one of Taiwan's largest industrial unions, staged a slew of activities at the Taipei Grand Regent Hotel in commemoration of its 60th birthday. Since 1945, when it was created, TAMI has been expanding its presence at home and abroad. With around 2, 300 member firms enrolled, TAMI is now the island's second-largest industrial association, trailing only the Taiwan Electrical & Electronic Manufacturers' Association (TEEMA).

TAMI was originally named the Taiwan Association of Iron-related Industries. It underwent several re-organizations and was officially named TAMI in April 1948. TAMI is the first industrial association in Taiwan with 21 operational industrial association spin-offs, including the Association of Smelting, the Taiwan Woodworking Machinery Association.

At a celebration ceremony held in Taipei on Nov. 11, 2005, TAMI chairman Fred P.C. Huang pledged to push the machinery industry into the list of Taiwan's top industries with annual production value exceeding NT$1 trillion (US$31.25 billion at US$1:NT$32), like each of the semiconductor and thin film transistor-liquid crystal display (TFT-LCD) industries, by 2008.

Celebrities presented at the ceremony included those from the government, academic, research and industrial sectors. They were Vice Premier Wu Rong-yi, Deputy Speaker Chung Jung-chi of the Legislative Yuan, Vice Economics Minister Shih Yen-shiang, Director General Chen Chao-yih of Industrial Development Bureau, and Chairman Earle J.S. Ho of the Chinese National Federation of Industries. At the ceremony, TAMI chairman presented many awards to outstanding member companies that have contributed to the continuous growth of the domestic machinery industry for the past six decades.

Huang stressed Taiwan is a small island of 23 million population, accounting for a mere 0.5% of the world's total population, but it ranks fifth in terms of output of machinery. In respect of exports of individual machinery items, Taiwan ranks fourth worldwide in the category of machine tools, No. 3 in woodworking machinery, No.6 in precision mold, and No.5 in textile and plastic processing machinery, in 2005.

According to statistics compiled by TAMI, overall production and export value of Taiwan machinery industry amounted to NT$590 billion (US$18.43 billion) and NT$415 billion (US$12.96 billion) in 2004, up 18% and 17.6% year-on-year respectively. The association predicted the industry would be able to challenge NT$640 billion (US$20 billion) in production value in 2005, helping it gain one spot to be named as the world's fourth-largest concern.

Surviving in the High-tech Shadow

Huang noted the domestic machinery industry has preserved and thrived with no special handouts from the government sector over the past six decades. "Over the past few years, the government has leant too much towards the hi-tech industry, rather than the machinery industry which has been viewed as a conventional sector, " Huang lamented. "The government has to give the machinery industry a shot in the arm by helping manufacturers acquire the industrial land they need to expand their operations here without the need of moving their production facilities overseas. Taiwan's machinery industry has long been eager for government assistance, as the industry is in a period of quick transformation. Cheap industrial land would help our domestic machinery manufacturers boost their international competitiveness."

"Taiwan is now facing a period of reforms and TAMI needs to embrace that, " Huang stated. "TAMI will take its role to help the government improve and upgrade the domestic machinery industry. Ideally, a business model for the machinery industry in the next two decades should focus on the development of talented technicians. TAMI will work with professional training institutions, vocational schools, universities, and graduate schools to cultivate the next generation of professionals."

TAMI is definitely a bridge between members and the government, Huang stated, "We will continue to strengthen relations with foreign industrial organizations to help domestic machinery manufacturers boost exports. Many of our members are smaller companies that are unfamiliar with the government's industrial policies. So TAMI needs to provide a channel of communication between them and the government."

On the emergence of mainland China as a world factory, Huang said, "I don't think the fast growth of mainland China's machinery industry will adversely affect domestic machinery industry because both sides can utilize the advantages of each other to grow. We can tell from the evolution of the human history. Such industrialized nations as the U.S., Germany and Japan are still growing by developing more sophisticated products despite the growth of some developing nations. Although some large-sized domestic manufacturers in this line have relocated their manufacturing facilities to mainland to make use of the cheaper production costs there over the past several years, Taiwan still has its advantage in developing a stronger machinery industry."

He continued, Taiwan has laid a solid foundation in basic industries since the restoration of the island from Japan at the end of World War II. Since that time, the domestic machinery industry has established a solid value chain, including research and development, design, manufacturing, marketing and distribution. Domestic machinery manufacturers can control every element of the value chain by themselves, and this has given them a competitive edge over rivals in other nations. If domestic manufacturers can retain R&D and marketing capability in Taiwan, their relocation of manufacturing facilities to mainland will be no harm to domestic machinery industry. In addition, Taiwan has a sound and healthy central-satellite factory system that augurs well for the continued growth of the machinery industry. Although a few manufacturers in this line have already set up assembly plants and sales outlets in the mainland, most domestic machinery manufacturers are not so anxious to relocate there.

Eyes on China

Statistics complied by TAMI show that so far only 7% of domestic machinery makers have established production facilities on the other side of the Taiwan Strait, mostly in the Yangtze River Delta area. But the manufacturers are paying a lot of attention to that market, because approximately half of Taiwan's total machinery exports go to the mainland and Hong Kong.

Although machinery manufacturers in mainland China are exerting pressure on Taiwan producers with their low-priced products, Huang expressed confidence that Taiwan's machinery industry will maintain its international competitiveness over the next few years. "The mainland's machinery industry has been growing rapidly because of its lower production costs, which enable manufacturers there to sell their products at low prices in the international marketplace. However, Taiwan's manufacturers can also maintain their competitiveness by continuing to develop sophisticated, high-value-added machines."