The Taiwanese-invested Shang Chuen Weighing Machine Co. tried once and failed to market its electronic scales in mainland China, where it is located, but exports have been so strong that a second factory has had to be built. The new four-story facility, which opened in March in Dongguan, Guangdong Province, is able to turn out 10,000 scales per day, adding to the 3,000 units coming from the old factory.


"We had to build the new factory to deal with increasing demand," says Shang Chuen`s chairman, Lee Woo-hsung, who explains that along with a six-story worker dormitory it cost his company US$4 million. Now, with his vastly expanded production capacity, Lee expects revenues to double this year. He is also confident that a plan to develop the domestic Chinese market will succeed this time.

The parts used to assemble the company`s products are procured from Taiwanese-invested suppliers in China, which, Lee explains, helps to assure product quality. A development team consisting of 20 design specialists, located in Taiwan, costs Shang Chuen about 5% of its annual revenues-and that figure does not include the cost of mold development.

The firm currently offers over 100 products, which are protected by about 40 patents.

The chairman claims that the smart design of his scales makes them popular in such major market areas as Europe, the United States, the Middle East, Latin America, Japan, South Korea, Russia, and Eastern Europe. Next year an effort will be launched to develop the domestic market in China, which, Lee stresses, has quite a strong potential.

About 70% of Shang Chuen`s products are sold under its own "SATRUE" brand, which, Lee says, means "highest precision" in the Taiwanese language. The remaining 30% are shipped under original design manufacturing (ODM) orders.


Emphasis on Added Value

The company`s scales are designed for weighing a wide variety of items, from precious articles like jewelry to groceries to bulky things like gas canisters. Today Lee and his team are putting more emphasis on high-value-added scales such as those for weighing valuable items and others for monitoring the ratios of fat and water in the human body.

"These scales," the chairman explains, "command higher profits than our previous line of products, thanks to their sophisticated design." Several models of these new products have already been introduced.

One of the new models, the SDM-1020, is the smallest diamond scale in the world (it is the size of a pack of cigarettes), Lee claims. It has a maximum load capacity of 20 grams or 50 carats. It also weighs in ounce and denarius weight (DWT) units, so that it can also be used for measuring gold. It is powered by four AAA 1.5-volt batteries, and its power is shut off automatically if it is not used for thee minutes.

The SD-H2100, measuring 100mm x 62mm x 18mm, is ideal for weighing chemical substances and displays weights in grams, ounces, dwt, and troy ounces (ozt). The scale is powered by two CR2032 lithium cells and has a load capacity of 200 grams. Like the SDM-1020, it shuts off automatically after being idle for three minutes.

Both of these models feature greater accuracy with greater lightness of the objects being weighed. For the SDM-1020, for example, with objects of less than 10 grams the unit of measurement is 0.001 gram; for objects weighing more than 100 grams, the unit is 0.002 gram.

These scales use Shang Chuen`s proprietary load cells-the weight sensors used in electronic scales--which are claimed to be more accurate than imported counterparts. Lee lists other advantages as well: "Our products also have reasonable prices and are very portable, making them attractive to buyers throughout the world." European suppliers have developed more precise scales, he comments, but those products are bulky and have to be connected to AC power sources; Japanese suppliers, for their part, also offer battery-powered scales, but they are relatively large.

Shang Chuen recently expanded into end-user scales, which have a much broader market, and such products now account for half of the company`s total revenues. Lee says that his is the only Taiwanese company that turns out end-user scales.


Measuring Physical Condition

A household scale that the company introduced recently is a patented product that monitors the body fat and water ratios of users` bodies, thus giving an indication of physical condition. (Older models could monitor only body fat.) The latest model, the SBF-2007, allows up to 12 different users to save their own personal data from seven consecutive weightings.

The SBF-2007 features a readout on a 5cm x 10cm liquid-crystal display (LCD) screen. The user enters age and height, and weight is then measured by a load cell inside a pad at each of the scale`s four corners; after calculation, the scale displays whether the user is underweight, overweight, or normal, along with his or her body-fat index. Calculation of the body-fat index is different for Asians and westerners; for Asian users, the calculation formula was developed by Taiwan`s Department of Health, while that for westerners was developed by the World Health Organization (WHO).

This scale, measuring 35cm x 35cm x 4.5cm, has a tempered glass board etched with copper-clad sensor circuits that is protected by patent in Taiwan, Germany, China, South Korea, the U.S., and Japan.

Lee set up Shang Chuen in 1983 and claims that today, his is the foremost Taiwanese company in the line. The chairman was inspired to manufacture tamper-proof scales 37 years ago, while serving as a soldier on the offshore island of Kinmen; dispatched to the market one day to purchase groceries for his unit`s mess hall, he returned with less food than others had procured with the same amount of money. He was suspected of theft, and jailed. "But I didn`t steal the money," Lee insists. "The disparity occurred because the dishonest vendors tampered with their scales. Because of their complicated circuitry, electronic scales cannot be manipulated."

When Lee went into business he began importing scales from Japan, and two years later began manufacturing scales that, however, still used load cells from Japan. After another three years, he began exporting.

"It was very difficult to promote our scales in our early years," Lee recalls, "because society was still full of conservative sentiment and most grocers were technophobes. Also, they were scared of by the high prices of the scales." The electronic scales then cost around NT$20,000 (US$625 at NT$32:US$1) each, so it is little wonder that vendors continued using the old spring scales.

But Lee overcame the initial difficulties and educated vendors about the convenience of the more advanced models, and eventually controlled 90% of the Taiwan market for electronic scales. Shang Chuen`s share has since inevitably slipped, to about 60%.



Overcoming Climatic Problems

The company`s first exports went to Romania, then part of the Soviet Union. Romania proved to be an especially good market after the Soviet Union collapsed and the freed-up market economy fueled a demand for more accurate scales. The first scales shipped to Romania proved a setback, however, when differences in temperature and humidity reduced their accuracy. This was an unexpected problem, and it was soon rectified. Shang Chuen had overcome its first technological challenge.

The company further upgraded its technology when it became a contract manufacturer for the Shimadzu Corp. of Japan in 1994. "The Japanese company helped us improve our manufacturing techniques, especially load cell techniques, and also asked us to install a computerized temperature and humidity testing chamber," Lee explains. Even today, Shang Chuen`s testing chamber remains the only one of its kind in Taiwan.

With the technology acquired from Shimadzu, Shang Chuen became the only Taiwanese manufacturer in its line capable of producing its own core parts. To keep its load cells from losing sensitivity because of metal fatigue, it imports aircraft-class aluminum from the U.S. for the bodies of the cells. The company now makes cells for sale to other companies as well as for its own use.

Shortly after it began shipping products to Eastern Europe the company set up a production base in Xiamen, a city on the coast of China just across the straits from Taiwan, with the aim of developing the Chinese market. Following the model he had used in Taiwan, Lee tried to sell his electronic scales to grocery stores and open-air vendors. But, the chairman laments, "All of my efforts failed, because the vendors there were afraid that my scales would put a stop to their scams." The output of the Xiamen plant was then switched to export markets.

The company has made great strides in selling scales for commercial use. Shipments of scales for weighing recycling coolants, for example, totaled 30,000 units last year-reportedly, three-quarters of total worldwide sales of 40,000. "Business people prefer our scales over others," Lee states, "because our scales are durable and we always have parts for them, no matter how old they are. And, when customers send scales to our headquarters for repair, we usually charge them only for the cost of replacement parts." If the machines are sent to one of Shang Chuen`s 100-odd dealers in Taiwan of five in North America, however, a labor fee is usually charged as well.

Lee has served as chairman of a weighing-industry association in Taiwan for two terms, and is greatly upset about the counterfeiting that goes on. Many of his own machines, he laments, are copied soon after hitting the market. However closely the knock-offs match the originals in appearance, however, he insists that they can never match the quality and precision of Shang Chuen products. (Aug. 2006)

(by Philip Liu)