CNC Lathes the Only Machine Tool Group in Taiwan to Post 30% Growth

Taiwanese makers of lathes, both conventional and advanced automated models, enjoyed remarkable growths in production and exports due robust demand globally in the first 10 months of last year; however the growth has declined into the negative by November last year and is expected to continue for the next few months due to the impact of the global recession.

Over the past two years, some makers in Taiwan have been developing improved, multifunctional lathes, with some veterans claiming to have completed development of computer numerically controlled (CNC) models that can cut, mill, and grind, hence able to process complex workpieces in a single cycle to shorten production time.

These new models, many makers claim, are to be showcased at the biennial Taipei International Machine Tool Show slated for March 2-7, 2009 at the Taipei World Trade Center's TWTC Exhibition Hall.

Despite the global downturn since mid-2008, many Taiwan manufacturers in this line say they have generated considerable business in China for its world-leading economic development. Among other positive signs, the automotive sector in China, including auto parts making, continues to be the envy of the world as it has attracted many foreign investors and automakers. This plus China's new efforts to expand development into the western hinterland will continue to generate demand for more machine tools as lathes etc.

There seem to be indications of renewed demand in other countries as well, encouraging Taiwan's lathe producers to expect better sales in the year ahead. One of the fastest-growing demand is for high-precision, high-speed lathes used by high-tech industries-a segment lathe makers on the island have been targeting with increasingly sophisticated models.

Promising Category

The Taiwan Machine Tool Foundation (TMTF) figures show that Taiwan exported US$735.59 million of lathes in the first 10 months of 2008, up 31.7% from US$558.459 million a year earlier, with such machine tool category being the only one to post over 30% year-on-year growth in sales in the period.

The top-10 export outlets for Taiwan-made lathes in the first 10 months of last year, in descending order, were Hong Kong and mainland China together, the U.S., Germany, Turkey, Brazil, Thailand, Malaysia, the Netherlands, South Korea, Italy, and India.

C.C. Wang, CEO of the TMTF, says local lathe makers would not have seen growth in the last two months of 2008, and don't expect to see any in the first quarter of 2009 for the global recession, which has sapped demand for machine tools worldwide over the past few months. Wang anticipates that the sector may see moderate recovery to emerge in the second quarter of this year.

Trader With Design Skills

Richyoung Machine Tool Co., Ltd. is a rare breed of traders in Taiwan with design ability for CNC lathes and related accessories. The company mainly markets CNC lathes and related accessories made according to special requirements.

Working with five to 10 large-sized machine-tool manufacturers of CNC lathes, the company takes custom orders, which are filled by redesigning standard machinery to meet customers' special requirements.

Isabel Wu, spokeswoman for Richyoung, says her company has close ties with its suppliers which offer price-competitive products, production flexibility, and more importantly, very high quality.

Wu notes all the machines are videotaped for their functions to prove they actually work effectively and as claimed before delivery, a surefire way to build trust and credibility.

A regular exhibitor at various global trade fairs, the company says in 2008 it participated in the show in Japan, Thailand, Spain, and Chicago, with the results achieved in Span particularly satisfactory as many inquiries have been received over the past few months.

Richyoung's trade show schedule for 2009 includes the TIMTOS (Taipei International Machine Tool Show) to be held in March in Taipei and the EMO show in Milan, Italy in October 2009, with the former event to see it showcase CNC lathes, machining centers and sawing machines.

One notable display planned for the TIMTOS is the RIC-TC5200 series CNC lathe with spindle bore from 6" (153mm) to 20" (500mm). With strengthened structure for heavy-duty work, its head stock features auto three-speed transmission. And the machine has an optional C-axis function for spindle indexing at any speed. Plus its bed-center-located ball screw makes for higher stability and stronger structure; while the twin V-slide ways enables high precision machining.

Targeting Emerging Markets

"Our customers have been mainly European, but beginning in 2009, we will go all out to tap emerging markets for we have to diversify export, which is realistic as we know that our brand is recognized in most machine-tool markets globally," Wu states.

The company admits to feeling bleaker business since November. "But I believe we've performed better than our peers as many have seen orders nosedive since September last year," Wu says.

Wu does not hold back to tout the company's specialty, which is filling orders calling for combined container loading or delivering in one batch a variety of machine tools. "We offer an all-in-one window to speed up shipping a combination of machine tools to one buyer," says Wu. "Being a dedicated trader, we deliver services faster than manufacturers. In addition, we have agents in five overseas offices, including Germany, Italy, France, Spain and United Kingdom, which are staffed by qualified technicians who make sure product quality and deliver prompt after-sale services." Meanwhile the company continues to look for more overseas sales agents in other major markets.

Flatbed CNC Lathes

A deceptively-young manufacturer of lathes is Everox Industrial Co., Ltd. Founded in March 2000 in Taichung County, central Taiwan, Everox specializes in manufacturing bed-type milling machines, heavy-duty bed-type CNC (computer numerically controlled) milling machines, powerful flatbed CNC lathes, heavy-duty precision lathes, and vertical machining centers.

"Though Everox has only been in business for a fewer years, each of our R&D technician has over 20 years of experience in mechanical development and production," says K.C. Yeh, president of the company.

About 60% of the company's output is computerized machines, with conventional models making up the remainder.

Despite not being one of the larger players in the sector, Everox can compete against bigger rivals in production capacity due to having a well-established satellite-supplier network. Still, the company admits to feeling teething pains as export orders grow; so the company moved to a new 36,000 square foot plant a few years ago, which is five times bigger than the old one.

Mostly Exported

Exporting some 80% of its total output under its own Everox brand, the company ships most of its flatbed CNC lathes to Europe, Southeast Asia, and the U.S., with its bed-type milling machines generally destined for Brazil, Germany, and Southeast Asia.

Attributing the strong demand for his company's machines to a combination of reasonable pricing and high performance, Yeh says: "Our CNC milling machines are nearly as accurate as the higher-priced counterparts from competitors in industrialized countries."

Everox says it can equip its automated milling machines and lathes with any kind of industrial CNC controller, as well as supply PC-controlled models. Its CNC milling machines are servomotor powered, making them suitable for either heavy-cutting or mold-making; while simple machining jobs can be manually operated efficiently.

Recently the company introduced two series of innovative products: the deep-hole drilling machine and floor-type lathes. The deep-hole drilling machine has a maximum drilling capacity of 200mm in diameter and can handle workpiece up to 6,000mm long; while the floor-type lathe is available with four capacities: 230mm, 255mm, 360mm and 410 mm in bore diameters.

To build profile and market globally, the company is a regular participant in international and regional machine tool shows in Taipei, Kuala Lumpur, and Bangkok.

Tapping Core Technology

One maker of lathes in Taiwan who has tapped his formal training and work experience is Lee Hsing, who founded Liouy Hsing Co. in June 1992. A typical example of a local entrepreneur without advanced college education, Lee has been using self-developed manufacturing skills to build high-end CNC lathes.

After graduating from Salu Technical High School, Lee worked for a couple of local machine-tool manufacturers and then a manufacturer of precision connectors for the electronics and PC sectors, which eventually went under at the end of 1991 after failing to compete against the Big Leaguers.

An apprentice-turned machinery manufacturer, Lee learnt ample skills to design and produce precision CNC lathes via working for major manufacturers as Victor Taichung Machinery Works Co. and Goodway Machinery Co. for over a decade before setting up his own shop. In short, the man knew the way to succeed in the line is to tap his core know-how to build Liouy Hsing. "Only by being dedicated to developing innovative products with core manufacturing skills can domestic manufacturers in this line survive globally without fearing fierce price competition from developing nations," comments Lee.

Stay Focused

"If domestic manufacturers of machine tools stay focused on their core business without going off on unrealistic tangents, they can achieve sustainable development backed by a well-established network of suppliers for cast iron, pig iron and steel, fastener, electronics, and so on," says Lee. "In addition, the technology-intensive machine-tool sector relies on passing on valuable information accumulated through development. No one can steal such information unless a developer totally ignores the importance of sustainable operation."

In only a few years, Liouy Hsing is capable of rolling out a wide range of lathes, including CNC, bench, high-speed, automatic, vertical, and CNC turning and milling centers.

Altruistic Entrepreneur

Clearly an altruistic, socially-conscious man, Lee is now chairman of Salu Technical High School Alum Association, and lives up to his promise to pass on core manufacturing skills to his contemporaries by always hiring 10 students in his workshop to help upgrade their R&D know-how.

Lee's sense of corporate responsibility also has seen him donate precision high-speed lathes to local technical high schools, his way to show gratitude to the educational system for having cultivated in him basic mechanical knowledge.

Lee says his company is a highly capable maker in the lathe sector in Taiwan, shipping some 80 high-speed lathes monthly; while Liouy Hsing expects to steadily expand based on its motto of "healthy and sound development," which has helped the maker to achieve, over the past five years, year-on-year sales growth of 10%.

Liouy Hsing is also a top performer, with annual sales reaching NT$500 million (US$15.24 million), making its average production-value-per-worker the envy of its peers in Taiwan.

Exporting to 47 nations, Lee says: "We're warmly welcomed worldwide for we adopt planned production rather than bill-to-order, allowing us to achieve a one-week lead-time after order confirmation; while having ample capital enables us to keep adequate inventory to fill rush orders from any market."

Multi-tasking Lathes

Force One Machine Co., Ltd., established in August 1997, specializes in developing and producing multi-tasking CNC lathes (turning centers) with a well-equipped production facility in Taichung County, central Taiwan.

With a background in mechanical engineering, the company's general manager Charlie Lin has over 20 years of manufacturing experiences, including working as the chief engineer at Turret Machinery Co., one of Taiwan's leading machine-tool producers.

Since its inception, Force One has been devoted to designing high-performance, automatic, high-efficiency and high-quality CNC lathes. After only a decade but backed by the right spirit, the company has become a key supplier in Taiwan of multi-tasking CNC lathes on the OEM (original equipment manufacturer) basis.

Force One mainly supplies turning centers, twin-spindle CNC lathes, and Y-axis turning centers which effectively handle high-speed front and back turning, drilling and multi-function machining. Equipped with bar feeder and gantry robot system, these machines are flexible manufacturing and high-output units for unmanned machining, features of which enable the company build solid competitiveness globally.

Higher Margins

The company notes its twin-spindle CNC lathes effectively help operators achieve higher profit margins by cutting costs with automated production; while the company's multi-tasking CNC lathes can better machine larger-diameter metal bars relative to conventional counterparts.

Force One currently exports mainly to Germany, France, Italy, the United Kingdom, Czech Republic, Finland, and Switzerland, with other markets including Russia, Turkey, South Africa, Australia, Southeast Asia, mainland China, and Argentina.

Another sought-after advantage the company offers is complete, personalized after-sale service, and the company says foreign customers are demanding faster delivery to cope with the ever-changing global economy.