Plastic Processing Machines Taiwan Catches Up With Industry Leaders On Quality Front

Once primarily known for their competitive pricing, Taiwanese manufacturers of plastic- processing machines are now turning heads in the global market with products rivaling and even beating their Japanese counterparts in terms of quality and functions. This has paved the way for Taiwan's rapid rise to become the fourth-largest exporter of such machines in the world, with overseas sales averaging US$700 million last year.

The Taiwan plastic-processing machine industry was born back in the Japanese colonial days (1895-1945). However, it has only been in the last 20 years or so that local producers have turned out machines of their own design. Today, local manufacturers of injection-molding machines can even beat their Japanese rivals in making certain kinds of mold, according to experts at the government-backed Plastics Industry Development Center (PIDC). The industry has also grown to include around 250 manufacturers.

Injection-molding machines are the biggest segment of the market, commanding three- fourths of output in Taiwan. Extrusion machines come next, with a share of slightly under 25%.

Advantages and Threats The center notes that Taiwan has several advantages in the plastic-processing machine industry, including the support of a strong CNC (computerized numerically controlled) machine-tool industry, an abundant pool of design specialists, and a well-developed plastics product industry.

Nevertheless, the center worries that Taiwanese equipment manufacturers will soon be overshadowed by mainland Chinese rivals, which are learning quickly from the growing numbers of Taiwanese firms planting roots across the Taiwan Strait. "Once they begin making equipment in the mainland, whether they are advanced models or not, they are transplanting valuable technology to the mainland, " laments a senior PIDC specialist surnamed Wu.

At the same time, mainland China represents a great opportunity for machine producers in Taiwan. The mainland is now the largest export destination for Taiwan's plastic-processing equipment, absorbing around 45% of the export total.

Wu believes that if Taiwanese manufacturers are to stay ahead of their mainland Chinese competitors, they need to develop machines for products demanding high-precision manufacture. In fact, local machinery manufacturers are already moving in this direction; for example, injection-molding equipment makers, which once earned most of their revenue from machines for making traditional consumer products, now depend mainly on equipment for producing consumer- electronics products and auto-body parts. "Many of them have contacted us about plans to develop machines for making medical-use products, " he notes.

In the extrusion-equipment sector, most of the newer models produced in Taiwan are able to make environment-friendly bags, rather than just non-biodegradable bags. Some equipment manufacturers predict that the next wave of machines in their industry will be able to make bags using nano-materials.

The vast mainland Chinese market has attracted not only Taiwanese equipment suppliers, but also suppliers from other countries such as Japan and Germany. Many of the foreign arrivals are forming ties with Taiwanese manufacturers to smooth their entry into the mainland market; the result is that their Taiwanese partners have benefited from a better product image in the international market.

Technical Leader Founded around 40 years ago, Tung Tai Machine Works Co., Ltd. Now specializes in plastic-extrusion machines for producing material pellets, profile products, sheet extruding, pipe forming, and bag blowing.

The company is one of only a handful of Taiwanese manufacturers of plastic-extrusion machines with a strong technical capability. For over a decade, it has contracted renowned chemical-technology organizations in Taiwan and abroad to help it develop machines able to use the latest, most advanced plastics. These organizations include two chemical-research heavyweights as well as the Union Chemical Laboratories of Taiwan's government-backed Industrial Technology Research Institute, the Plastics Industry Development Center, and several domestic academic institutions. The company has also worked with the internationally respected Hans Weber Maschinenfabrik GmbH of Germany on machine development.

As a result, the company is able to make material-pellet machines with throughput rates from five kilograms an hour to 1500 kilograms an hour. Its sheet-making machines can turn out sheets comprising up to five layers, and its pipe-making machines can turn out plastic pipes in diameters from three millimeters to 63.5 centimeters. The company's polypropylene (PP) bag-blowing machines, it claims, can produce 70 kilograms of bags an hour in widths ranging from 200 millimeters to 700 millimeters, compared with 45 kilograms of bags in widths ranging from 200 millimeters to 500 millimeters utilizing machines supplied by the company's rivals.

According to company sales manager Johnny Zhou, all of these machines perform comparably with European models. The company's twin-screw bearing machines use bearings, barrels, and gear-boxes made of high-quality German-produced steel, while the bearings, barrels, and gear-boxes on its single- screw bearing machines are made of Japanese steel.

Every year, Tung Tai ships around 50 complete machinery systems under the "Tung Tai Machine" brand. Most of its exported machines are sent to mainland China, Southeast Asia, and Hong Kong. Zhou says his company now has around 70% of the PP bag-blowing stationery machine market in Asia (excluding Japan) and has 200-some customers in the mainland for its whole-plant production lines for various plastics products. He adds that around 30% of his company's machines are tailor-made models.

Responding to global concerns for better protection of the environment, Zhou's company began making machines for the production of biodegradable plastic products around four years ago. The company also offers reclamation machines that can reproduce pellets from used and rejected (ie, defective) plastic products.

Tung Tai began producing machines for making pipes, profiles, and pellets around 20 years ago, following a period of similar length in the specialized production of bag-blowing machines. It began cooperating with Hans Weber 12 years ago and has invested heavily in product development over the past decade. Today, the company invests millions of NT dollars on product development each year. "Today, we are among the top five plastics- equipment manufacturers in Taiwan in terms of technology, " Zhou reports.

On average, Tung Tai turns out four types of new machine every year, keeping the company up to date with industry trends. "You have to be five to 10 years ahead of your customers in terms of market outlook so that you can develop machines that can meet all their emerging needs, " he notes.

Zhou says that nanotechnology will soon be given wider application in the making of plastic products, especially bags. The technology, he notes, can make bags much lighter and more durable. His company is now actively engaged in developing machines to make nanotech plastics products.

Zhou's company saw its revenue grow 25% last year compared to 2001, a big jump since the Sept. 11, 2001 terrorist attacks in the U.S., due chiefly to the recent rollout of several attractive models. He says that his company has a sufficient backlog of orders to keep its plants running at full capacity until April this year.

Film-Blowing Queen Queens Machinery Co., Ltd. Has specialized in film-blowing equipment since it was established 31 years ago. The company is now the world's largest manufacturer of such machines and the leader in film-blowing technology in Taiwan and mainland China, according to company president Tony Ko.

Over the past 28 years or so, the company has exported hundreds of thousands of machines, accounting for about 30% of the bag-film market, Ko claims. "In many Asian countries, we have been responsible for 50% of supply, " he purports.

The firm's exports include 5, 000 EP50N film- blowing machines, which are used to produce high-density PE bags. "This model is very inexpensive compared with equivalent models made by European manufacturers, but it is just as efficient, " Ko says. His company began developing this machine after taking part in a German machinery show in 1983.

The company's latest film-blowing machine puts out 60 kilograms of bags per hour, double the output of its earlier models.

Queens has sold 180 film-blowing machines to the No.2 plastic-bag maker in the U.S., Ko says, and the U.S. buyer has recently ordered another 40 machines from his company.

Queens operates three factories in Taiwan and one plant in mainland China. Its product line now includes single-layer film-blowing machines, multi-layer film-blowing machines, coating and laminating extrusion machines, dry/wet laminating machines, cast-film and sheeting machines, flexo/roto printing pressers, cast-film and sheeting machines, blow-molding machines, bag-sealing machines, reclamation extrusion machines, and slitter/rewinder machines.

"We are the only Taiwanese manufacturer of film-blowing machines capable of making whole-plant systems, " Ko claims. His company's two factories and headquarters building in Tamsui, Taipei County produce film-related equipment, while its Taichung factory specializes in printing machines. Its mainland factory produces low-priced machines for sale in the domestic market there.

The company's mainstay products are large- capacity multi-layer film-blowing systems, which it sells in five specifications. Its biggest model comes with a 100HP or 150HP motor capable of putting out 150 kilograms to 300 kilograms of HDPE film for bags per hour and 250 kilograms to 400 kilograms of LLDPE film. The smallest model, powered by a 15HP or 30HP motor, turns out 40 kilograms to 90 kilograms of HDPE film and 50 kilograms to 110 kilograms of LLDPE film per hour. The company first debuted the machines some 10 years ago and now puts out around 10 such systems a year.

Queens also installs microcomputers on its flexographic printing machines, rotogravure printing machines, extrusion laminators, slitting/rewinder machines, and dry/wet laminating machines.

Ko says his company adopted a low-pricing strategy early on to quickly expand market share. After it reached critical mass in selected overseas markets, he says, global heavyweight chemical manufacturers started to knock at its door. "Their desire is to co-develop machines for their latest plastics formulas, " Ko states. The firm has worked with these chemical manufacturers to develop machines suitable for the latest plastic materials, including high- density PE, liner high-density PE, and metallocene PE.

Like other manufacturers in this line, Queens has developed machines for making environment-friendly bags that biodegrade when exposed to sunlight and when buried, and can be melted down without emitting pollutants. The biodegradable bags are mostly made of a mixture of cornstarch powder and PV, while the bags that can be melted down are made of a mixture of calcium-carbonate powder and various types of plastic. Ko says his company is now the major supplier of equipment to Wei Mon Industry Co., Ltd., the leading manufacturer of environment-friendly bags in Taiwan.

Queens uses German-made screw bearings on its machines to ensure their durability and quality. The company spends at least 1% of its annual revenue, estimated at NT$1 billion (US$29 million), on research and development.

To further ensure top-notch quality, Queens conducts comprehensive in-house testing on every machine it makes prior to shipment. Normally, the company offers a one-year maintenance and repair warranty for mechanical problems and a half-year warranty for electrical-system problems.

In addition to its own-brand models, Queens also makes machines for several German, Italian, and Japanese suppliers on an original equipment manufacturing (OEM) basis. The enterprise exports machinery around the globe, including Asia (20% of the total), the United States (10%), and Europe (5%). It has a multilingual sales staff able to speak English, Russian, German, Spanish, and Japanese. Thanks to its wide market area, the company avoided the fallout from the 1997~8 Asian financial crisis, though it was still hit by the international business downturn following the 9-11 terrorist attacks. "We still had new markets to turn to and develop during the 1997 crisis. But the post-9-11 downturn has been universal, and we have had no other places to tap, " Ko explains.

Injection Molding King Injection-molding machine maker Fu Chun Shin Machinery Manufacture Co., Ltd. Expects 2003 to be another good year, with sales projected to rise 30% from 2002. The publicly held company has reported earnings of over NT$2 per share and revenue of NT$1.3 billion (US$37 million) for last year.

Wang Po-hsun, the company's president, bases his company's optimistic forecast on a resurgence of demand after a post-9-11 lull.

Fu Chun Shin is Taiwan's largest manufacturer of injection-molding machines, and it aims to become the No. 1 in Asia as well. "Size is a particularly decisive element in this industry because the big players usually have an advantage due to their huge production scale, quality reputation, broad product line, brand identification, and wider range of international-quality certifications, " Wang says.

In 1981, the company installed integrated production lines so that it could process the majority of the parts used in its machines in- house, ensuring supplu and quality. Since then, the company has invested heavily in retooling its factory to adopt the flexible manufacturing system (FMS) developed by Mazak of Japan. It has also installed large CNC horizontal boring and milling machines, medium-size boring and milling machines, and machining centers made by Ikegai Corp. of Japan, horizontal machining centers made by Toshiba, CNC horizontal boring and million machines made by Heckert of Germany, and five-phase machining centers made by Awea of Taiwan--all recognized as the top in their respective lines.

Its testing lab is also outfitted with sophisticated instruments made by Zeiss of Germany and Japan's Kawatetsu, Hitutoyo, Goko, Akashi and Mitutoyo, as well as Elcometer of the United Kingdom. The lab is staffed by 20 specialists sporting advanced degrees. In addition, Fu Chun Shin frequently works with several laboratories of the government-backed Industrial Technology Research Institute (ITRI) to develop key technologies.

In 2001, Fu Chun Shin presented Taiwan's first high-speed close-loop hybrid injection molding machine and high speed closed loop double- color hydraulic and electric injection molding machine. It subsequently debuted electric injection molding machines, making it the first manufacturer in Taiwan able to make hydraulic, electric and hybrid machine models.

Citing a study by Kunststoffe Plast magazine of Germany, Wang points out that the world market of injection molding machines will be dominated by hybrid models with 38% share, followed by hydraulic model's 34% and electric model's 28%.

At its well-equipped production and testing facilities, Fu Chun Shin can produce machines with clamping force between 30 tons to 3, 000 tons. These machines are well suited for the production of various plastic products, from electronics parts to automobile bumpers.

Fu Chun Shin currently supplies plastics injection molding machines, high-speed close- loop hybrid injection molding machines, thermosetting injection molding machines, double color injection molding machines, sandwich injection molding machines, PET preform injection molding machines, gas- assisted injection molding system, PET preform molds, and plastic injection molds.

Wang expects the demand for injection molding machines this year to be greatest in the auto and electronics industries based on business trends over past few years. Last year, the No. 1 electronics retail chain in Taiwan, Tsann-Kuen Multinational Group, ordered 263 injection-molding machines for over NT$300 million (US$8.6 million) from the company.

Mainland China is now the company's primary export destination, accounting for over half of its revenue, as a large number of the island's plastics-product manufacturers have moved across the Taiwan Strait, in whole or in part, to reduce production costs and tap the promising market there. In order better to serve these transplant firms, the company has set up a plant in the mainland and is constructing a second factory. Fu Chun Shin projects revenue from mainland China to soar to NT$2.5 billion (US$71.4 million) in 2010 from last year's NT$300 million (US$8.6 million). The company expects to increase turnover to NT$10 billion (US$285.7 million) by 2010.