Making the most of their considerable production capability in making high-end, customized, environmentally-friendly hand tools, some Taiwanese suppliers have succeeded in carving out niches in the global market for chests, roller cabinets and tackers.

Taiwan and China are the world`s two biggest exporting countries of hand tools, commanding 14.7% and 24.9% of the global market, respectively, with export values generated totaling NT$51.95 billion (US$1.625 billion at US$1: NT$32) and NT$88.13 billion (US$2.754 billion) in 2006.

The hand-tool makers in Taiwan and China take totally different tacks to compete and explore the global market, with the former focusing on R&D to meet demand for high-end tools, and the latter exploiting its volume and cost-effective capacities.

Noteworthy is that Taiwan`s average export price stood at NT$194.8 (US$6.088) per kilogram in 2006, higher than China`s NT$78.1 (US$2.44)—indicative of the fact that Taiwanese makers have succeeded in creating much added-value in their hand tools.

Working with academic groups and the government to develop new tools adopting environmentally-friendly raw materials and innovative functions, Taiwanese makers have successfully exported their hand tools to the world`s major markets. For instance, the U.S. absorbed the largest portion, at 33.2%, of Taiwan-made hand tools in 2007`s second quarter, with Germany taking 5.6%, Japan 5.5% and the U.K. 4.7%.

A handful of hand tools makers on the island have applied their expertise to carve out niches globally—delivering chests, roller cabinets and tackers; at the same time they are doing their utmost to fine-tune their products to conform to green requirements and standards.

OA Furniture to Tool Chests



One maker who has successfully diversified its production to find a niche for tool chests and roller cabinets with stylish exterior design in Taiwan is Machan International Co., Ltd., which started out by making OA (office automation) metal furniture in 1975, but, since 1985, has been turning out tool chests and roller cabinets for auto garages and automakers.

Its strong commitment to quality saw Machan become ISO 9002 approved, while the company is known as a competent tool chest maker on an OEM (original equipment manufacturer) basis. Unsurprisingly, the company is one of the most successful, specialized makers of this kind in Taiwan, providing high-end, well-received products worldwide.



The success that Machan has effectively built in the global market for tool chests and roller cabinets is attributable to its motto "turn products into something stylish like fashion clothing," according to Jessy Chang, marketing manager of the company. Machan’s tool chests and roller cabinets feature not only strong structure for better durability, but also eye-catching exterior design and incredibly practical functions.

"A tool chest or a roller cabinet is nothing more than a complementary tool for a user; thus, we have to try our best to create high added-value," Chang said. Backed by production processes with high flexibility, Machan can turn out highly customized models according to special needs and is always studying various markets so as develop models suitable for such different areas. "This helps us to build strong loyalty in our clients," she noted.

However, from a marketing perspective, Chang emphasized that being actively focused on R&D can help Machan lead the market, a strategy that Machan has been trying to adopt by recently setting up a unit to do research. Such approach is proving effective as the company showcased an incredibly innovative 5-drawer chest at a trade fair, one designed with colorful impressions and an integrated stereo that succeeded in drawing ample attention from foreign buyers.

To be sensitive to rising eco-awareness and conform to the global standards banning toxic ingredients in metal products, Machan is on its toes—having made an early move to restrict using such harmful materials five years ago, according to Michael Wu, the company`s R&D and production director. “We also send our products for SGS certification, have set up a laboratory to test finished products in-house, and take any customer feedback seriously, helping us to deliver the best environmentally-friendly products,” he added.

Wu said that the company is trying to work on enlarging margins by producing roller cabinets for medical application, with such products commanding higher profit but setting a higher technical threshold. “We have already developed antiseptic, nanotech-based metal surfaces and components for roller cabinets to be used in hospitals,” said Wu, which shows that Machan has proven capacity as a maker of medical-use cabinets.

To cushion the impact from the labor shortage in Taiwan, Machan recruits young employees through joint educational programs at colleges, effectively injecting itself with new blood, according to Eve, vice general manager of the company.

She is quite proud of Machan’s young, energetic workforce, whose teamwork drives corporate success. “They are Machan’s invaluable assets—always efficient, being rich source of ideas, and are easy to communicate with. I believe Machan feels like their home, a place worthy of their effort. Ours is a positive corporate culture,” says Eve.

Japanese-taught QC Lesson



Also specializing in making tool chests and roller cabinets, Tung Chieh Industries Co., Ltd., founded in 1973 in central Taiwan, is a living example that a small OEM company can grow significantly by focusing on quality.

Tung Chieh started out by turning out mixers, parts washers, sanders and DIY (do it yourself) products, and then expanded its line by adding tools chests, storage boxes and roller cabinets, a feat made possible by being experienced in supplying local large-sized suppliers with related parts.

Having quickly accumulated the capability to turn out tool chests and roller cabinets mainly for the car-making and auto-repair sectors, Tung Chieh exports 99% of its products to the world market, with one-third-plus to Japan and just under one-third to Europe.

Summing up Tung Chieh`s formula for success, quality is a key factor, according to Kim Tsai, chairman of the company. "Workers at Tung Chieh knows the bottom-line of our quality requirement—turn out only product quality that you would buy yourself,” Tsai indicated.



Tung Chieh employs advanced numerically controlled machines, press brakes and laser processing machines to ensure precision. Refusing to compromise quality in spite of skyrocketing prices of metal materials, Tsai said that the company works hard to improve production process, and has built an integrated production line in-house to minimize unnecessary cost and secure special processing technologies.

In response to increasing concerns about eco-protection, Tung Chieh has stopped using restricted toxic materials five years ago, and has already succeeded in applying ferrous sulphate in electroplating, instead of using chromic acid. "We also require our contract suppliers of parts, such as slide rails, which also need to be electroplated, to use environmentally-friendly materials," Tsai said.

In fact, Tung Chieh`s insistence on high quality was born of its working with a Japanese client. "About seven to eight years ago when Tung Chieh was still a small supplier focusing on merely production volume, a globally well-known Japanese client came to place orders but asked us to follow their quality control measures. It was an extremely tough job for a small manufacturer like Tung Chieh to do so at the time,” Tsai recalled.

"However, we worked hard and finally succeeded on our own, effectively cutting the defective rate from 0.008% to 0.0003%," he said. "Indeed, it turned out to be a precious, helpful experience for us to quickly upgrade our production capability," he said. At the moment, Tung Chieh has quite a few European clients who completely trust the quality of the company`s products—some even skip quality testing as they know Tung Chieh has been approved by the Japanese client.

Always trying to build a competitive edge into its products, Tsai revealed that the company has developed a reinforced roller cabinet, which has maximum working load of 200kg and heavy-duty drawers that last more than 100,000 repetitive openings and closings, making the item perfect for storing heavy parts as moulds and cutters.

Top Gun in Central Taiwan



Founded in 1984 in central Taiwan, Jann Yei Industry Co., Ltd. is a specialized maker of staple guns, hammer tackers and electric staple guns, who has built a solid reputation with its passion for providing innovative, easy-to-use tackers.

Ton-yi Chen, chairman of Jann Yei, said that the company was a small manufacturer 10 years ago, when it only supplied parts as an unknown contractor to local large-sized hand tool makers. However, being dedicated to product quality and R&D has transformed the company rapidly into one of the most renowned suppliers in the sector in Taiwan for overseas buyers.

At present, Jann Yei exports 50% of its products to Europe, and another half to America, and also fine-tunes functionality and exterior design of its tackers to meet various demands in different markets. Jann Yei’s product lines is wide ranging, covering both low and high-end tackers, with the better margins generated by the high-end models propping up the company.

Jann Yei offers a highly practical cable tacker, which is derived from its prototype JY series tackers. These cable tackers are multi-functional and can fix cables and wires of different shapes and sizes with its patented staples developed in-house. Also, the company`s electronic staple guns all feature plastic-coated bodies, compact design, and prolonged product life rated at over 40,000 repetition, making it ideal for industrial use.

Another cable tacker is also an innovative, practical hand tool that can attach cables to surfaces with a plastic ring for safety. The tacker is mainly developed for household users to decorate Christmas trees, according to Tsai.

"Jann Yei is quite committed to quality and R&D. We work with a number of professional industrial designers and the government-funded Industrial Technology Research Institute to develop new staple guns and tackers to better meet demands," Chen said. “For example, we have developed conventional tackers that last more than 40,000 repetitions, which is much higher than China-made counterparts.”

To export to Europe, where eco-standards are strict, Jann Yei delivers staple guns that already meet RoHS (Restrictions on Hazardous Substances) requirements, as well as sends finished products for testing by SGS.

"We pay special attention to electroplating and have stopped using lead-containing paints on metal parts," Chen said. "Furthermore, our clients are welcome to ask for analysis reports on finished products. In other words, we just want to keep our products safe and friendly to environments."

Such efforts have helped Jann Yei win recognition from foreign buyers, including some global brands of hand tools. "We believe that as long as Jann Yei continues to sharpen its competitive edge in quality and R&D, clients will be willing to outsource from the company," Chen said.

It may seem extraordinary for a company to reap considerable profits by specializing in making staple guns and tackers, in stead of other mainstream hand tools; however, Jann Yei`s presence proves that plentiful business potential exists even in niche segments so long as Taiwanese suppliers play by the rules of the game, not the least of which include delivering green products and investing in R&D to create items with high added-value.


(by Steve Chuang)