Honesty and Ethics Help Pacific Precision Survive and Grow

Taiwan's No. maker of tie-downs for trucks expands product line to include full-body harnesses and rock-climbing gears.

Wu Ren-tsun says that he enjoys running a business that requires honesty and high ethical standards. Honesty and ethics must pay off; his company, Pacific Precision International Ltd., has become Taiwan's No. 1 manufacturer of tie-downs for trucks, and has now added full-body harnesses to its product line.

“Since tie-downs are related to trucking safety and full-body harnesses to the safety of workers suspended in the air,” Wu comments, “making those products absolutely reliable for workers is the same as fulfilling an ethical contract with them.”

Pacific Precision has shipped over 288 million tie-downs—with a total length that would encircle the planet 1.44 times—since its establishment in 1970. Among its major customers are the U.S. and German militaries. When Taiwan's government was drafting the Chinese National Standard (CNS) for tie-downs about a year ago, the company was invited to offer its suggestions for the job.

The company was originally set up by Wu and his brother, J.L. Wu to make umbrellas, but it shifted to tie-downs when umbrella manufacturers began moving away from Taiwan in the 1970s.

The brothers put stability before expansion in their first two decades of making tie-downs, but they began expanding in the third decade by setting up tie-down parts factories in mainland China and Malaysia in 1992. In 1998 the Chinese factory, in Shandong Province, was outfitted with integrated manufacturing capability, allowing it to handle almost everything needed for tie-downs, from harness weaving and dyeing to assembly.

In its fourth decade, Pacific Precision is focusing its efforts on brand-building, introducing its “4 Safe” brand in China and other Asian markets four or five years ago. For Western customers, contract manufacturing remains the norm.

The company has also branched out into products associated with personal safety, including full-body harnesses, rock-climbing gear, and rescue belts. “Growing competition in the tie-down industry has pushed us to seek profits in the life-security segment,” Wu Ren-tsun explains. Gross margins for tie-down making have dropped to only 10% or so, he says, whereas in life-security gear the figure is over 40%.

Also, he stresses, a company has to keep moving to survive: “I haven't seen any company that has stayed above water by relying on a single product or a single market.”

Diversification demands stricter quality control, and the firm is committed to delivering products that are 100% defect-free. “The United States, Germany, and Singapore have all legislated a requirement that all trucks must fasten their cargoes not with ropes alone but also with tie-downs,” Wu notes.

Over the next decade Pacific Precision expects to spend some NT$152 million (US$5.2 million at NT$29:US$1) to purchase 26,400 square meters of land in an industrial park in central Taiwan to accommodate its expansion plans. The land will hold not only production facilities but also rock-climbing and high-workplace training grounds.

Once the expansion is completed the company will devote more capacity to full-body harness and rock-climbing gear with the aim of boosting sales in those to categories to 70% of total revenue, up from 30% now. The ratio of tie-down production will, at the same time, fall from the current 70% to 30%.