THS 2010 Hosts Generally Upbeat Hand-tool Makers in Taipei

Industry output value in first six months already 60% of that in 2009

Undaunted by the still wavering global recovery, the organizer of the 10th Taiwan Hardware Show (THS), held Oct. 21-23, 2010 at the TWTC (Taipei World Trade Center) Hall 1, apparently pulled off a reportedly well-received event with better organization, wider spectrum of professional-caliber tools, and more positive mood among the buyers.

The global downturn in 2009 actually set up a convenient opportunity for Taiwan's hand tool industry to prove itself that it can bounce back from a nearly 30% drop in production value that year. So far the suppliers in Taiwan have to thank the global recovery for their very rapid recuperation in the first half of this year. The Industrial Technology & Intelligence Service's survey confirms the promising comeback: the industry's overall output came to NT28.5 billion in the first half, already 60% of the NT$46.3 billion total for 2009.

Although the exhibitors at the THS 2010 have mixed views of the industry's prospects next year, some heavyweights who were interviewed, including Honiton Industries Inc., Re-Dai Precision Tools Co., Ltd. and A-Kraft Tools Manufacturing Co., Ltd., are optimistic about 2010, a year that has been rewarding in building increasing global recognition for their products and capabilities.

Time-tested Name
Founded in 1979 in Taichung County, central Taiwan, Honiton is a seasoned, influential maker of sockets and socket wrenches on the island, whose attendance at the THS 2010, to some degree, reflects the maker's optimism.

A devoted OEM (original equipment manufacturer) of sockets, Honiton added wrenches to its line in 2004, marketing its products worldwide, especially in Japan and Europe, and is known as a time-tested, trustworthy hand tool supplier in Taiwan.

M.C. Cheng, chairman of the company and ex-chairman of the Taiwan Hand Tool Manufacturers' Association (THTMA), pointed out that Honiton is a breed apart for its keen sense of user-friendliness of auto repair tools. In other words and based on end users' feedback and its expertise, the company continues to tweak, fine-tune sockets till they become literally a second pair of hands to car mechanics. Besides, each of Honiton's sockets is developed in complete compliance with international standards as DIN.

This year, Cheng noted, his company has completely recovered from a terrible sales decline in 2009, and is confident of returning to the 2008 peak level. “Our 2010 sales are expected to reach 80% of that in 2008. We are sure steady sales growth will be sustained in the coming years along with stable global economic recovery.”

Buoyed by the upbeat performance this year, the company debuted its newest box wrench series at the show, which are all made of high-grade chrome vanadium steel and mirror finished. Also notable is that each wrench can fit six different sizes of bolts and nuts, meeting the growing trend for multifunctional, lightweight tools. “The wrenches meet DIN standards and have been exported to Europe, where they're quite popular, while we want to bring them to the U.S. as soon as possible,” said Cheng.

Top-caliber Ratchet Wrench Maker
Practically gloating from receiving an influx of orders, chairman S.C. Yu of Re-Dai Precision Tools Co., Ltd., one of Taiwan's top-caliber makers of ratchet wrenches and auto repair tools, also confirmed 2010 as an auspicious year relative to 2009.

Commenting on increasingly intensifying worries about market uncertainties starting in the second half of this year, Yu said, “We have noticed that market recovery has been spreading from the U.S. to Europe and Asia, so there are still good reasons left for Taiwanese companies to be optimistic about a brisk market in the remaining months of this year. I am pretty sure Re-Dai's 2010 sales will even rebound to surpass that in 2008.”

One main reason behind Yu's optimism is steadily growing demand for professional-caliber auto repair tools, for he mentioned that sales of higher-end tools, including air sockets, ratchet handles and specially designed ratchet wrenches, have significantly grown this year. He believes that the professional segment is key to Taiwan's hand tool industry for the segment is comparatively immune to a weak economy and consumer spending as it had already proven throughout 2009, while its growth usually remains stronger than the DIY market.

Possible Slowdown
Although some believe that the global economic growth may slow in 2011 due to negative factors, including some EU members' austerity measures and modest American economic performance, Yu still sees a bright market for the year, partly because of Taiwanese makers' increasing competitiveness in the higher-end segment and partly because of the signing of the ECFA (Economic Cooperation Framework Agreement) between Taiwan and China.

Yu pointed out that ECFA will make China's huge, lucrative market more accessible to Taiwanese companies than before, which is critical to the industry's sustainable development. “In fact, Re-Dai has been making progress in China since 2009 and we're certain to see stronger sales growth there year by year.”

The 26-year-old company displayed its full range of hand tools and auto repair tools, including ratchet wrenches and handles, sockets, angle pipe wrenches, packing tools, extension bars etc. Making brightly-colored ratchet handles proved effective, with the series easily capturing visitors' attention. Yu said that the series target DIY and professional female users.

Adamantly Positive
A-Kraft's chairman Louis Chen is adamant that Taiwan will become the world's biggest sourcing platform of higher-end tools. Founded in 1988 in Taichung County, A-Kraft specializes in production and promotion of auto repair tools, including sockets and related accessories, extensions, ratchet handles, wrenches, tool sets and roller cabinets, around 70% of which fill export OEM orders and the remainder as OBM (original brand manufacturing) orders. With over 80% of its sales generated in Europe's professional market, the company is known as a world-caliber supplier.

“Few can question that the industry has recovered with the global economy this year. A-Kraft's 2010 sales will hopefully be 30-40% more than 2009's or 20% more than 2008's,” said Chen.

After several months of very strong, quick growth in sales mainly driven by inventory refill, however, Chen has noticed a significant slowdown since July, mainly due to economic weakness in advanced countries that breeds buyer caution. Worse is the rising New Taiwan dollar against the greenback that undermines the recovery of exporters.

Higher Turnout
However, Chen stated that the reality is not that gloomy, based on the increasing number of foreign buyers at the THS 2010 compared with the 2009 edition. “Our customers tried to import cheap tools from emerging countries, but have returned for more reliable goods and services, hence more foreign buyers this year,” he said.

Perhaps a partially altruistic move, Chen and 16 local peers formed the T-Team a few years ago to create synergy to leverage teamwork to enhance Taiwan's hand tool industry in the global supply chain. It is too early to tally the score, though Chen stressed that it is worth the time and effort to continue building a concrete basis upon which to survive and grow. A-Kraft has shared its fully computerized management system with members to help them raise operating efficiency to match that of large, international enterprises.

Taiwan's Largest Roller Chest Maker
Taiwan's largest roller chest and tool case maker Machan International Co., Ltd. debuted its newest Treasure series roller cabinets.

All made of cold-rolled steel, painted in bright colors with attractive tactile feature, the Treasure series cabinets are available in optional colors. Also the drawers feature auto-return, buffered slide tracks, and rounded edges to avoid injuring users. Plus, there are retractable tables on either side for added convenience, with the smaller one rated at 1kg and the larger 3kg load capacities.

Initially making OA metal furniture in 1975, Machan diversified into chests and roller cabinets for garages and automakers in 1985, with its line including service carts, work benches and stations, magnetic parts for display stands, and related accessories.

The rise of the company is attributable to its aesthetic-oriented strategy. The company's marketing manager Jessy Chang said: “Machan believes even mundane

tool cabinets can look stylish.” Most of the company's tool chests and roller cabinets can outsell competing models for their attractive, value-added exteriors, not to mention functionality and practicality.

With Machan also a core member of the T-Team, the chairman C.L. Chang brims with optimism about the success of the alliance, agreeing with A-Kraft's Chen that the T-team bodes well for Taiwan's hand tool industry.

No. 1 Blow Molded Plastic Tool Case Supplier
Seen busy in the midst of brisk buying at the THS 2010 was Taiwan's best-known blow molded plastic toolbox maker, Casemate Plastics Industries Co., Ltd., who made contacts with new customers and rebuilt links with old ones.

Founded in 1987 in Taiwan's central county of Taichung, the company has been producing blow molded boxes for different purposes for over 20 years. Backed by know-how in hollow plastic molding, the company turns out a variety of toolboxes, cabinets, boxes, plastic containers and accessories, plastic products, tool holders and tool bags.

“Casemate has been cultivating stronger recognition among customers for some years,” said Hunter Lu, R&D and sales manager. Doing the same as in 2009, the company focused on branding and image building, showing only a few blow molded plastic boxes on the showground. But the strategy has worked over the past two years, as foreign visitors and buyers have been impressed by the product quality to gradually associate such merit to the Casemate brand.

The company reported satisfaction with the THS 2010, partly because of better show organization and partly because of the higher buyer number. Without talking about sales recovery too much, every Casemate staff at the show confirmed their company's recovery and growth, well on its way to a world-caliber ODM (original design manufacturer) and OBM (original brand manufacturer).