Taiwan Scores in Sports Balls and Nets With Quality and Variety

Like their counterparts in other traditional industries, makers of sports balls and nets in Taiwan have upgraded their operations by adopting advanced technologies, high-end materials, and multifunctional designs. These efforts are helping local producers develop new market niches and stay ahead of the ever-increasing number of rivals, most operating out of low-cost emerging economies.

Sports balls are traditionally made of rubber and sponge, but newer materials are now more often being incorporated into local products, such as synthetic leather, nylon, polyethylene (PE), polyurethane (PU), and laminated butyl. Moreover, the advanced printing techniques available today make it possible to use different patterns and designs on the surfaces of different kinds of balls.

In addition to variety, quality and cost are key factors to success in the sports ball and net line. To lower manufacturing costs, almost all of the domestic manufacturers in this sector have moved production lines to Southeast Asia and, more frequently, mainland China, where industrial land and labor are cheaper.

Overseas production has not, however, proved to be a wholly satisfactory solution. Taiwan manufacturers in the mainland are facing intensifying competition from both fellow compatriots who have set up in the mainland as well as a groundswell of new locally grown rivals.

The threat from indigenous mainland companies is particularly worrisome, and becoming more so, with each new entrant. Industry insiders say that mainland producers are developing quickly, in terms of number, size of operation, technical sophistication, and capitalization, and will soon pose a serious threat to Taiwanese firms in the global market.

Nevertheless, Taiwanese makers have one formidable weapon in their armory, and that is R&D and management expertise--two areas in which they are still a few laps ahead of their mainland competitors. These assets, they believe, can help them continue to succeed in the global market for medium- and high-level products.

International Production Network

Founded as a manufacturer of rubber tubes, plugs and inflatable toys in 1949, Yuan Chi Rubber Sporting Goods Mfg., Ltd. Has developed into the diversified Yuan Chi Group. Group affiliates include Yuan Chi Overseas Ltd., the group's headquarters in Taiwan, Starlike International Ltd. (also in Taiwan), Vega Balls Manufacturing Co. (Thailand) and two plants in Fujian Province of mainland China. Today Yuan Chi is a leading professional maker of sports balls and other sporting goods.

Yuan Chi did not make its first foray into the sports ball market until 1972, when it started to turn out rubber inflatable balls. In the same year the company received its first order of basketballs from the world brand, Spalding.

The company's operations in Taiwan peaked in 1984 when its second plant was established and its employee count reached 400 persons. In 1987, Yuan Chi began selling its own brand "VEGA" products to overseas market.

That same year, the company's factory in northern Taiwan burned down, prompting the company to move its production lines out of Taiwan, where the manufacturing environment was changing.

In 1988, Yuan Chi set up VEGA Balls Manufacturing Co. in Thailand, a joint venture with Grand Sport Group, a leading sportswear maker in Thailand. The plant there can turn out about 25,000 balls per day.

It wasn't until 1993 that Yuan Chi expanded its operations to mainland China by establishing a factory in Xiamen, Fujian Province. Two years later, it opened another plant there to meet swelling demand in both export and domestic markets.

In 1997, the group established Yuan Chi Overseas Ltd. In Taiwan to handle the group's manufacturing, trade services and global market development.

According to Catherine Wang, deputy managing director of Yuan Chi Overseas, the United States has been Yuan Chi's major export outlet, accounting for around 60%-70% of its output. "The market in Europe is growing although it now absorbs only 10% of our products," she says.

Yuan Chi turns out 95% of its ball products on an original equipment manufacturing (OEM) basis and just 5% under its "VEGA" brand. "The world's sporting goods market is mostly dominated by such brands as Nike, Adidas, Franklin, Lotto, Spalding, Wilson, Puma, and Reebok. It's not easy for Taiwan's brands to get a foothold in the brand world," Wang says. "Nevertheless, Europe and the mainland are potential markets for Taiwan brands. The former is suitable for small-volume customized orders, while the latter shows promise for mass-produced products at lower prices."

Generally speaking, sports balls come with one of two basic types of surface treatment. One kind is machine or hand stitched balls, and the other is laminated balls. The production volume of the latter is usually one tenth of the former, and the price is higher since the manufacturing process is more complicated.

"The kinds of balls we produce depend on the market. For instance, our buyers in South America prefer laminated balls and those in North America need stitched balls in large quantities," Wang explains.

Today Yuan Chi provides nearly every kind of ball, from basketballs and handballs to footballs and volleyballs. All are made by a global workforce of 1,800 persons, of whom 1,200 are in mainland China and 600 are in Thailand.

Playing Ball with Big League Names

Over the last more than three decades, Continental Chemical Industries Co. has grown into a large and successful manufacturer of sports balls. As early as 1971, the company formed technical cooperation ties with Mizuno Corp., Japan's largest sporting goods manufacturer, to upgrade its manufacturing ability. The company later imported advanced winding machines and bladder forming machines from Japan to greatly elevate its manufacturing level.

In its early years of operation, Continental produced mainly rubber balls; and in 1977 it added high-end synthetic leather laminated balls to its line. After years of effort in upgrading quality, the company has earned international certificates for its products, which have been used in world championship games.

Like many of its industry peers, Continental moved its production base to the other side of the Taiwan Strait. In 1993 it established a plant in Guangzhou, Guangdong Province called Conti Tai Young Sporting Goods Co.

In 1996 the company started to produce basketballs for Wilson on an OEM basis, and three years later its top quality volleyballs were approved by the China Volleyball Federation for use in national volley ball games in the mainland. The company has also been ISO 9002 certified.

Continental makes most of its sports balls on an OEM basis, however, it also sells a small portion of its products under its "Conti" brand. "Our 'Conti' balls are gaining a reputation in the world market. Our 'Conti' volleyballs are particularly popular in such European nations as Germany, the Netherlands, and Hungary," says Yang San-fu, chairman of the company.

The United States has been the company's major export outlet, mainly for basketballs.

Yang notes that there are considerable differences between the various regional markets of the world in terms of sports ball demand. In the U.S., basketballs and footballs are in high demand, while European countries buy a relatively larger number of soccer balls and volleyballs.

The preferred materials can also vary according to age and professional or amateur usage. "Balls used by the elderly and children should use softer materials to protect them from injury," Yang notes.

Different materials also affect the qualities of the balls, such as the elasticity and surface grip. One material adopted by Continental in its basketballs is split leather with deep pebbles of sponge carcass. The balls feature deep notches on the surface for better handling and tough nylon windings to improve durability and balance.

In addition to basketballs and volleyballs, Continental supplies a wide range of other balls, including soccer balls, water polo balls, dodge balls, hand balls, tetherballs and American footballs, all of which are exported.

Yang notes that unique surface designs and patterns on sports balls are becoming more popular among players. Such additions, he says, add value to the balls, but they also require sophisticated printing and chemical knowledge.

Continental has a strong background in both printing and chemical industry and is able to meet various printing demands requested by its clients. Recently the company developed several balls with eye-catching designs for special orders from its clients.

Although the company faces increasing competition from mainland counterparts, its business has remained strong. "Taiwanese products have an established reputation in the world market and I think foreign buyers still prefer to deal with Taiwanese manufacturers because they can guarantee product quality and delivery times," Yang says.

Made in the Mainland, Managed in Taiwan

Good Green Products Corp., established in Xiamen, Fujian Province in 1995, is a Taiwanese-invested manufacturing firm. The company turns out different kinds of rubber products, and sports balls are its major items.

"Our plant in Xiamen occupies an area of more than 4,000 square meters and employs some 1,000 local workers. But the management comes mainly from Taiwan," says Jenny Chuang, a sales official at the company's office in Taiwan. "Mainland workers are often sloppy and passive about their work, so the company needs to take more time to train them."

Chuang notes that most sports balls makers have moved their plants to mainland China and such Southeast Asian nations as Thailand, Vietnam, and Pakistan. "But producers in these countries generally turn out low-end to mid-range products, while their Taiwanese counterparts focus on the medium to high-end."

Good Green specializes in the production of basketballs and volleyballs. Most are made of rubber and some are laminated with synthetic leather, such as polyurethane (PU) and polyvinyl chloride (PVC). The company purchases rubber materials from Southeast Asian nations and sources PU and PVC materials from Taiwan.

Currently Good Green's monthly output is around one million balls, of which 80%-90% are exported to the U.S. and Europe.

Chuang says that her company has faced heightening competition in recent year as more and more mainland Chinese rivals emerge. Nevertheless, the company has maintained profit margins of 10% to 20% and its revenue has grown annually by 20%-30% over the past three years.

Net Profits

In the sporting net market, Lins Corp. has established a strong position over the nearly 40 years since its founding in 1967 as a hemp-rope manufacturer. The company today supplies professional sports nets maker made at its mainland Chinese plant, established about ten years ago.

The company's plant in Dongguan, Guangdong Province has a workforce of more than 100 persons. "It's easy to find workers in the mainland, so we can operate an integrated plant there," says George Lin, the company's manager. "In Taiwan it's hard for manufacturers like us to complete all the manufacturing processes in the same plant as we can not afford to hire enough workers to handle all of the processes. That's why we had to contract part of our manufacturing processes from satellite plants," Lin explains.

Although manufacturing costs in the mainland are less than half the level in Taiwan, Lin complains that there is more red tape to deal with. Local mainland Chinese manufacturers are also steadily muscling into the line, posing a threat to Taiwanese makers. Many of the personnel in mainland rivals former worked at Taiwanese-owned operations.

Sports nets are mainly made of synthetic fibers, including nylon, polyethylene (PE), and polypropylene (PP). "Nylon, though more durable than PE and PP, is also more expensive than those materials, so the latter are widely used in a various nets," Lin says. "The materials, patterns, and sizes of our products depend on the needs of our clients. We also size our nets to meet the needs of different types of balls, which are based on world standards." The company purchases most of its synthetic fiber materials from Taiwan.

Lins supplies all of its products on an OEM basis. Currently the company's annual output is around 100 shipping containers of products, of which 45% are exported to Europe, 45% to the U.S., and the remaining 10% to Asia, Australia, and South Africa.

Contact information on companies covered by the article:

Yuan Chi Rubber sporting Goods Mfg.
9th Fl., No. 47, Lane 3, Jihu Road, Neihu, Taipei, Taiwan

Tel: 886-2-66006363

Fax: 886-2-6600-0198

E-mail: sales@yuanchi.com.tw

Good Green Products Corp.
No. 23, Kooshan 3rd Road, Kaohsiung, Taiwan

Tel: 886-7-561-2201/5

Fax: 886-7-561-2206

E-mail: sales@tehloong.com.tw

Lins Corp.
No. 16, Lane 643, Wen Lin Road, Shinlin, Taipei, Taiwan

Tel: 886-2-2832-1100

Fax: 886-2-2834-5625

E-mail: linstw@ms15.hinet.net

Website: www.linscorp.com.tw