Fair Friend Group, one of Taiwan's leading manufacturers of computerized numerically controlled (CNC) machine tools, recently announced that its total production for 2003 reached a combined 3,000 CNC machine tools at its facilities in Taiwan, mainland China, and Japan. This number makes it the largest manufacturer in the field among Taiwanese-invested and foreign-owned companies operating in the mainland. The group stated that its mainland output in 2003 was 600 machine-tool units.

At present, most each of domestic firmss with operationslocated in mainland China have a see monthly production capacity of amount to less than 30 units machine tools; and most foreign-invested firms in the mainland each produce only 20 up to 25 machine tools per month.

Jimmy C.Y. Chu, chairman of Fair Friend, harbors has grand eat ambitions forto takinge on its world-class rivals in this field head to head. To that end, he has recently bought a plot of land lot measuring 6.48 million square feet in Jiangdong industrial zone near Hangzhou in China's , Zhejiang Province of mainland China. Fair Friend isHe preparinges to erect a large-sized production complex with an annual production capacity of 4,000 machine tools on the site. At the already-bought land lot. After the proposed plant is inaugurated, the group will become one of the world's three largest manufacturers of machine tools.



As early as a decade ago, Fair Friend spearheaded to set up an assembly plant in Xhsiaoshan, Zhejiang Province. So far, The group has now established three plants in China,there with the third just one being recently inaugurated. The group streamlined its operations by has movinged some production lines from it's the overcrowded second plant to the newest.

One to make way for streamlining production procedure of the older one.

The group has set up There is a total of eight production lines in the three mainland plants, withhich an overall capacity ofare capable of producing 50 lathes and machining centers per month, making Fair Friend becoming the largest manufacturer of machine tools among Taiwanese- and foreign-invested machine-tool firms operating in the mainland. The group has set a China-production goal of producing more than 1,000 machine tools forin mainland in 2004.

In addition to the mainland production, Fair Friend is capable of rolling out 10 up to 15 machine tools per month atin its Japanese subsidiary —EMC Corp., 100 atin its flagship firm —Fair Friend Enterprise Co. in Taiwan, and another 80 atin its Taiwan subsidiary --Leadwell CNC Machines Mfg., Corp., per month.

Fair Friend acquired the financially -troubled Leadwell as a subsidiary some three years ago. After introducing aggressive such correction methods as personnel streamlining and expenditure cutting, Leadwell has seen its bank debt to banks drop to present NT$200 million (US$5.91 million) from the original NT$1 billion (US$29.658 million). The company is expected to post NT$50 million (US$1.47 million) up to NT$60 million (US$1.77 million) in net profits for last year, although its financial statement hasn't yet come out.


The group plans to establish five production zones in the proposed Jiangdong production facility in Xhsiaoshann when it is , three of which will be used for processing mechanical parts and , and remaining two for finished-product assemblyassembling machine tools. The three mproduction zones for processing mechanical- parts zones will, each occupying an area a land lot of between 216,000 and 288,000 square feet, making will be used to produce parts for forklift trucks, elevators, and parking equipment needed by its affiliates. T; the remaining twohe two assembly zones, to occupyying a combined land area of 432,000 square feett combined, will be able to turn out 4,000 machine tools in 2006, its anticipated first full year of operation. 2006. At that time, the group will be the world's third- largest manufacturer of machine tools, only behind only Mazak Corp. of Japan, and Haas Automation Inc. of the U.S.

Chu says entry of domestic satellite factories into mainland China over the past few years has prompted his company to raise production capacity in an effective way. "Over the past several years, we have employed moresome mainland-born talents in our production facilities, which has helped us quickly streamline and smooth our production procedures there," Chu notes. The company has to date employed mainland personnel right up to vice president level. "Other factors contributing to our high growth rate in that market include the offering of full-package unit-operationeducational training for our mainland customers and the establishmentxtensive deployment of a comprehensive marketing networks there."

The company employees mainland talents to take such high-level job positions with the rankings of vice president

and under to help it rapidly penetrate that market.

To lay a solid foundation in mainland, the company sets up 17 representative offices spreading over five regional markets--, including northern, eastern, southwestern, northwestern, and southern China.

Fair Friend has relocated the majority of its production capacity to the Xhsiaoshan Economic and Technology Special Zone near Hangzhou in the pastfor a decade with what Chu says isdue to the indispensable assistance of the Taiwan Association of Machinery Industry (TAMI). "In the beginning it was difficult But we couldn't stretch our arm at that time because of the insufficient support of peripheral industries to sustain our normal production of machine tools there until recent two or three years after domestic manufacturers of mechanical components began moving their plants there."

With the guarantee of sufficient supply of key components, Fair Friend has seen fast growth in production and sales in mainland over the past three years. The company has also duplicated its well-established manufacturing experience from Taiwan to mainland, which has helped boost production of high-quality machine tools there.