Ming-chuang Cheng made the development of brand names in the global market his top priority when he was elected chairman of the Taiwan Hand Tool Manufacturers` Association (THTMA) in September. Cheng is also chairmen of Honiton Industries Inc., a maker of wrenches.



While exports have soared in recent years, reaching US$2.57 billion in 2006, Cheng laments the fact that "Most domestic tool manufacturers still depend heavily on contract buyers, and their profits have declined sharply due mostly to price-slashing by mainland Chinese competitors." The mainland, he notes, replaced Taiwan as the world`s top hand-tool exporter in 2003.

"Nevertheless," the chairman goes on, "this crisis also presents an opportunity so long as we deal with it properly." He should know from experience; he has been in the industry for more than 30 years, and his association represents over 350 manufacturers throughout Taiwan.

The opportunity, Cheng stresses, entails promoting sales of hand tools bearing the brand names of their manufacturers. This will boost the value of Taiwan-made hand tools by moving them from under the thumbs of big-brand suppliers. "Many big American, European, and Japanese brands contract the supply of tools to Taiwanese manufacturers," Cheng explains, "and this proves that Taiwan-made tools have reliable quality. But however good they are, their quality is hidden behind the brand names of the foreign buyers."

But building a brand name is no easy thing, Cheng cautions. A brand represents its manufacturer`s qualities, manufacturing skills, products, reputation, and trustworthiness.

Cheng emphasizes that the foundation of a brand name is quality, and that quality is the result of diligent research and development work. "Everybody would say that quality is the key to a manufacturer`s survival," he comments. "Indeed it is. But the first step toward a brand name is a good R&D effort that ensures good quality, and only with good quality and a good brand name can your products be sustainable."

Cheng`s own company, with its "Honiton" brand, is a case in point. It is always introducing "smart" new products, most recently a multipurpose socket wrench for both professionals and household users that fits nuts and bolts of different types. The new wrench is patented in European and American countries. "We started developing our brand name about 10 years ago, along with the OEM (original equipment manufacturer) and ODM (original design manufacturing) services that the company had been provided ever since its establishment," Cheng recalls.

Furthermore, the chairman emphasizes, brand value exists in hand tools just as it does in cars and home appliances. "Despite their being labeled as products of a traditional industry," Cheng notes, "Taiwan`s tools have enjoyed a good reputation in the global market for many years and many of them are even given top-notch ratings thanks to their good quality and reasonable pricing. Without your own brand name, though, it is the contract manufacturers who will enjoy your advantages through contract manufacturing."

Cheng urges the government to provide a comprehensive set of measures to help local hand-tool manufacturers develop their own brand names, so that they can create a brighter future for themselves.
(by Ken Liu)