Taiwanese hand-tool makers are differentiating themselves from price-cutting competitors by adding features and developing smart designs for their products, some of which are labeled with the makers` own brand names.
This strategy has helped hand-tool manufacturing to retain its status as one of the few smokestack industries that still have a large number of factories operating in Taiwan. They have stayed behind while manufacturers in other industries have rushed to relocate in mainland China out of fear that their product designs and sophisticated metal-processing techniques would fall into the hands of their Chinese rivals.
One of the leaders in the line is King Tony Tools Co., which was founded in 1976 to supply hot-forge processing services but began producing tools for professionals and promoting its own "KING TONY" brand name, reports its president, Mark Wu, in 1984.
As a brand-name supplier, Wu stresses, his company places a lot of emphasis on quality. "Our hand tools exceed DIN standards by 30% in terms of torque force and durability,"he claims, "and our pneumatic tools top them by 50%."
King Tony makes its torque and pneumatic wrenches and other products (including socket sets, reversible screwdrivers, and tool trolleys) mainly of chrome-molybdenum steel. The products are certified by various industrial standards, including DIN, ANSI, ISO, VDE, and GS.
King Tony puts its own brand name on the red or blue slip-proof strips that encircle its sockets.
The company`s catalogue contains a total of 8,000 items, which are exported to more than 100 countries. Well-deployed overseas distribution channels make sure that the products reach retail stores promptly (it asks for a lead time of only 20 days); there are currently branches in France, Germany, the United States, Mexico, and mainland China, backed by a network of agents that help each other out when stocks run low.
Wu laments the competition that is making business harder even for companies, like his own, that market under their own brand names. "It isn`t only manufacturers that are building up brand names," he explains. "Retailers are promoting their own names as well."
My Hand Industrial Co., a maker of professional power tools (impact drivers, impact wrenches, and driver drills) headquartered in central Taiwan, recently began supplying tools for use in car garages as part of its effort to boost the level of its products. The company is following a strategy of moving from DIY into professional tools, with production at smaller volumes and greater varieties, explains its sales manager, Peter Tsai: “Tools for professional users are usually made to stricter quality standards than tools for home use, and small-volume, large-variety production can differentiate your business from that of your rivals."
In some markets, My Hand uses the brand name “LANCER.”
Niche or Commodity: Take Your Pick
Tsai notes that Taiwanese tool makers are facing a choice between niche products and commodity products. "Commodity products represent big-volume, low-cost production," he explains, "whereas niche products represent small-volume, high-standard production.”
My Hand is working to diversify its markets as well as its product line; it recently started shipments to the U.S. and Europe, breaking away from its long dependence on Japanese, South American, and Southeast Asian markets. Wherever they are sold, the products come with CUL, CE, GS, TUV PSE, SAA, ISO9001-2000, and RoHS certification.
In some markets the tools are sold under My Hand`s "LANCER" brand and logo of a dark knight on a jumping dark horse.
The sales manager says that his products emphasize not only high quality but also reasonable pricing. "In Taiwan," he continues, "tool makers like us, that are equipped with highly integrated production lines and strong design capability together with know-how about metal processing, are rare. Also, we have a strong customer base, healthy finances, and well-developed synergetic network. All of these things are advantages for us."
Tsai believes that changes in mainland China will make things more difficult for hand-tool makers there. "First of all," he explains, "the mainland`s recent reduction of export tax rebates will slow down the investment plans of Taiwanese manufacturers there, and even encourage them to move on to Vietnam. Also, some Western buyers have turned from China to Taiwan because of the inferior quality of mainland-made tools. Furthermore, the gap in production cost between Taiwan and the mainland has shrunk from some 30% to about 20% now."
Another Taiwanese hand-tool manufacturer, Good Tools Industrial Co., recently added fishing and handicraft pliers to a product line made up mainly of professional pliers for the repair and maintenance of computers, jewelry, electronic components, automobiles, electrical devices, and telecommunications equipment, as well as for gardening.
Many of the company`s models of pliers double as cutters, and a special design protects users from injury. One of these models is the MP-269, which has a clamshell design for stowage of the blades.
Good Tools uses slip-proof grips and safety devices on its pliers.
Good Tools is very well versed in the production of pliers, having been doing it for 25 years, and can deliver them in a variety of specifications. Its forged products are surface-treated with titanium electroplating or vibration polishing.
High-carbon steel from Japan, and Taiwan-made chrome-vanadium steel and stainless steel, are used in the pliers` bodies, which come with PVC- or TPR-based grips. The small-volume, large-variety mode of production is used; customers have more than 2,000 specifications of pliers to choose from, along with a number of tool kits. "Whatever the specifications,"insists the company`s vice president, C.Y. Chen, “we never delay shipment and never ship defective products."
Common Parts Keep Costs Down
Common parts are used as much as possible to keep costs down in making Good Tools` pliers, more than 90% of which are exported, some under the firm`s own "GT" brand. OEM and ODM (original equipment manufacturing and design) production, however, is Good Tools` main profit-spinner.
Echo makes its own tools as well as the cases in which it packs them.
The Echo Tools Corp. supplies socket sets for both manual and power wrenches, all of which are sold to professional shops. In mainland China and Malaysia these products carry the company`s “ECHO" brand surrounded by an elliptical circle; in other markets, they are sold under customer brands.
Echo operates plants in Taiwan and mainland China. Sales manager Amy Chen says that the Taiwan plant uses chrome-molybdenum steel, while the Chinese facility uses chrome-vanadium steel. "Our products conform to DIN and ANSI standards," Chen comments, "but they are actually more durable than those standards require," as proved by testing in an in-house laboratory.
In business for more than 20 years, the company now produces over 1,300 tool items and packs them in cases made with blow molds of its own development. "Our self-content ratio is pretty high," Chen says. "We have an in-house mold-development unit running several CNC machines and inspection tools. It also has design capability."Keeping most processes in-house allows the company to keep costs down and quality up.
The company guarantees delivery in 20 to 45 days, and to assure prompt delivery keeps inventory backlogs of its most popular items. The main export markets are Europe and the U.S.
The Whirlpower Enterprise Co. uses numerous user-friendly designs and durable materials in its screwdrivers, many of which are marketed under the company brand, "WHIRLPOWER," encircled by a green ring.
Whirlpower`s screwdrivers are marketed under the company’s own brand.
After more than 20 years in the industry, the company specializes in making screwdrivers and bits for DIY users as well as for professionals in the machinery, automotive, and electronic industries. Its catalog contains over 2,000 items, all of which are targeted at overseas markets, mostly in Europe, Asia (except China), the Middle East, and Latin America.
The products, all made in Taiwan, have won GS, VDE, and EN60900 certification. Whirlpower president J.F. Liu claims that one of his strongest competitive advantages is the possession of specialized technologies that are crucial to back-end processing.
(by Ken Liu)
