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Bathroom Fitting Makers Talk About Plans and Strategies in Slow Market

One maker targets SE Asia amid weak EU and American economies

2012/08/22 | By Steve Shen

Amid an uncertain global economy, weakened by the still limping peripheral economies in the EU and relatively high unemployment, slow housing starts in the U.S., most Taiwanese bathroom fitting makers have struggled with flat growths over the past few years. While the industry is not likely to turn around for many years, many undaunted operators are using different strategies, depending on core skills, to build sustainable growth.

Such effort to build future growth is centered in Taiwan's central county of Changhua, home to 600 to 800 bathroom fitting makers and subcontractors. According to a report issued by the Industrial Technology Research Institute, the industry in the region generates exports of tens of billion New Taiwan dollars yearly, with faucets and accessories being the major drivers.

CENS interviewed several makers to talk about their decades of experience and future plans.

Targeting Southeast Asia
To counter downturns in Europe and the U.S., Sans Chuan Co., Ltd., the only globally competitive maker of stainless steel bathroom fittings with full production lines in Taiwan, is targeting the comparatively robust Southeast Asian market.

Tapping the high potential profitability of branding of its line of quality stainless steel products, chairman Richer Xia has led a branding program for several years. “KOLM is our brand that has been tested to local standards in Singapore as well as being comparable to those in Britain and other advanced European countries. Most of our KOLM products meet Singaporean standards and are recognized among buyers around Southeast Asia,” said Xia.

Over the past year, Sans Chuan has built positive contacts with new customers in the region. For example, while KOLM faucets and bathroom fittings retail well in Singapore, the company has reached a cooperative agreement with a Filipino customer to open outlets nationwide in the archipelago, also inking a multi-year contract with a Japanese agent for local distribution.

Meanwhile, Xia said cheerfully that his company is close to partnering with a Chinese customer, who operates a 4,000-plus store chain, for OEM (original equipment manufacturing) and KOLM promotion. Additionally, Sans Chaun has also joined forces with a Thai die casting company to challenge VR Stainless Industries Group, the largest stainless steel bathroom fittings supplier with turnover exceeding hundreds of millions of dollars, and is ready to contract an OEM in Malaysia, operator of around 400 outlets, in the second half of 2012 after evaluating its factory in July.

Sans Chuan specializes in making bathroom fittings of stainless steel with  integrated in-house production.
Sans Chuan specializes in making bathroom fittings of stainless steel with integrated in-house production.

“We believe these partnerships will start contributing to revenue growth in 2013,” said Xia, which is especially important in markets with tight eco-regulations for lead-free stainless steel is used in making faucets and fittings without electroplating with hazardous chemicals. An added bonus is that such products are much easier to clean with water to cut use of bathroom cleansers

Integrated Production
On whether his company's supply can meet surging demand, Xia answered affirmatively, saying that Sans Chaun has sound production lines in house and will set up a new factory spread across 120,000 square meters in China starting in 2013, with automated warehousing and production as well as advanced, mature manufacturing technologies as lost wax casting.

Sans Chuan’s KOLM products sell well in Southeast Asia.
Sans Chuan’s KOLM products sell well in Southeast Asia.

Sans Chuan's integrated in-house production also helps to ensure consistent, reliable quality of KOLM products at competitive prices. Xia said that the company runs a modern factory across 23,000 square meters alongside a die casting plant, able to independently handle molding, prototyping and die casting, punching, welding, polishing, CNC machining and packaging.

Especially proud of the die casting factory with automated production that is a rarity in Taiwan, Xia said: “Sans Chuan has sufficiently large capacity to fill big orders quickly and efficiently, with 700 workers turning out about 380 metric tons of die castings monthly.”

“Sans Chuan will start supplying bathroom and kitchen sinks of stainless steel in the near future to broaden the KOLM range. With successful overseas operations and increasing brand recognition, we aim to build footholds in 15 Southeast Asian countries in three years,” said Xia.

Ching Shenger’s new factory in Changhua has layout and QC to ISO standards.
Ching Shenger’s new factory in Changhua has layout and QC to ISO standards.

R&D Oriented
In the face of slowing business, Ching Shenger Co., Ltd., backed by over two decades of experience in making copper showerheads, is engaged in research and development of higher manufacturing technologies to exceed peers, said the proprietor C.T. Lee.

Since being hammered by the financial tsunami in 2008, Lee said, the industry has lurched and has yet to recover to pre-meltdown level to force corporate streamlining for optimal operating performance, in addition to more investment in R&D to sharpen competitiveness.

Ching Shenger’s showerhead is seamless and mirror finished.
Ching Shenger’s showerhead is seamless and mirror finished.

For instance, Lee noted, the company has been improving welding techniques to roll out mono-block showerheads without screws for seamless surface, which can compete against models made in Italy and Europe that are widely deemed as top-end.

Efforts to improve technologies have helped the maker to stay competitive over the past years.

Yea Leng supplies drinking fountains, bubblers and valves meeting NSF standards.
Yea Leng supplies drinking fountains, bubblers and valves meeting NSF standards.

In-house Coating Line
Lee said Ching Shenger's fully owned coating factory is another key reason why the company can stay afloat amid a depressed industry. The company decided to acquire the plant many years ago mainly due to poor quality coating by subcontractors.

Owning the coating plant enables the maker to shorten lead time and enhance production flexibility, qualitative consistency. For example, Lee said that once 14 forty-foot containers of 10-inch showerheads were delivered in only a few weeks, far faster than 40 days required by the customer, without returned defects.

Yea Leng’s diverter valve is structurally improved for lighter weight and lower production cost.
Yea Leng’s diverter valve is structurally improved for lighter weight and lower production cost.

The plant also enables showerheads to be finished differently as per customer requirements with minimum lead content and certified by international standards as NSF of the U.S. Lee claimed that his company is the only showerhead manufacturer in Taiwan with its own coating factory, adding that OEM and ODM (original design manufacturing) orders are both welcome, and that newer, higher-end showerheads will be unveiled in international trade fairs in the U.S.

Hung Yu’s brass pipes are widely used in bathroom fixtures, firefighting equipment and kitchen fittings.
Hung Yu’s brass pipes are widely used in bathroom fixtures, firefighting equipment and kitchen fittings.

Niche Products
Despite global economic factors, Yea Leng Drinking Fountain Co., Ltd. continues to focus on developing drinking fountains and bubblers as niche products for offices and commercial applications to differ from peers and achieve sustainable growth, said the president C.F. Lai.

Similar to most counterparts in Changhua, Yea Leng began in 1986 by providing metalworking and processing services for local bathroom fitting suppliers, then diversified into making drinking fountains, bubblers and parts as diverter valves.

Seeing a me-too-saturated market of typical faucets, Lai turned to making professional models and valves for drinking fountains that call for higher technologies. “That decision proved savvy in an increasingly challenging market today,” said Lai, adding that only about five companies including his are in the sector in Changhua.

Hung Yu’s brass pipes are brazed with high-quality silver for brighter surface.
Hung Yu’s brass pipes are brazed with high-quality silver for brighter surface.

Without exaggerating the developmental process, Lai said that his company stumbled through trial and error, sometimes known as R&D, to improve valve structure, design and material properties to build better products. But Lai adopted computer technologies and advanced production facilities as CNC machining centers to strengthen R&D capability, production efficiency and in-house production of precision parts.

This maker turns out around 100,000 drinking fountains of various types, bubblers, bubbler valves and diverter valves for reverse osmosis water filters monthly, over 90% of which going overseas as the U.S. and the Middle East.

Zona turns out a full line of bathroom furniture and fittings.
Zona turns out a full line of bathroom furniture and fittings.

World-caliber
The maker's success in the niche sector is attributable partly to religious adherence to quality, said Lai, who said that the bubblers and diverter valves meet NSF standards by passing over 100 different tests on physical and mechanical properties and toxicity, most of which meeting NSF 61 and 42 standards. “This costs us several million New Taiwan dollars yearly but is worthwhile to help us become a top-quality supplier,” said Lai.

New wall shelves will drive growth for Zona in 2012.
New wall shelves will drive growth for Zona in 2012.

Besides holding over 100 patents in China, Taiwan and the U.S., the maker has seen returning orders in recent years after customers filled them in China for cheaper cost, but eventually realized that reliable quality outweighs price, said Lai.

Seasoned Know-how
Established in 1989 as a provider of welding services, Hong Yu Industrial Corp. focuses on satisfying customers with top-quality brass pipes backed by seasoned know-how, which the owner S.L. Chuang believes will help his company stay competitive amid a miserable industry.

The company is a major supplier of brass piping and bathroom parts for bathroom fixture makers and brand vendors in Changhua, whose products are also widely used as firefighting equipment, reverse osmosis water filters and kitchen faucets, turning out up to 50,000 brass pipes with standard specifications per month.

Chuang said the company's core skill is cutting-edge brazing and bending technologies, which are realized mainly with craftsmanship and full lines of precision manufacturing equipment as CNC lathes and pressing machines.

The company imports only silver solder that is globally certified as 56%-silver to braze copper pipe with minimum lead and cadmium. “A Japanese customer praised our factory during a tour for quality and manufacturing technologies,” said Chuang, adding that the brass pipes are mostly used in mid-to-high-end bathroom fittings to show Hong Yu's decades-long know-how.

The maker capably fills OEM and ODM orders as well as offers consultancy services. Chuang said that buyers are welcome to order brass piping in precision specification and small quantities.

R&D
Confirming shipment for the first five months of 2012 having grown moderately compared to that of 2011, Michael Wu, general manager of Zona Development Co., Ltd., said the company will keep focusing on product R&D this year, as new products is the heart of a supplier.

Initially a subcontract metal processor, Zona diversified into wire furniture and accessories like racks, shelves and hangers. But realizing that intense competition in the segment impedes sustainability of its business, Wu foresightedly steered his company into metal-tube furniture specifically for bathrooms about 10 years ago.

Following years of hard work on production transformation and improvement, the maker has expanded product category to include bathroom trolleys, corner racks, utility racks, multi-form carts, telescopic shelves, bathroom cabinets, cupboard tables, class display stands and cabinets, towel holders, toilet paper holders and bathroom fittings, all of which are popular and fully shipped to Europe.

With the Spanish debt issue unsolved and Greek economy barely on its feet, Zona has been reinforcing cooperation with subcontractors on development of functionally innovative products and using new materials, while exploring new markets like India and Russia over the past years, said Wu.

For example, Wu introduced the newest Shower Cabby series wall shelves, which are designed to meet European preference for compact, stylish and futuristic exterior, achieved with aluminum alloy bodies coupled with high-quality glass trays. This series, he said, has higher added value than ordinary models with cadmium-coated brass pipes. Lighter weight and popular prices also make this series hot-sellers in Europe, where consumers are more price-sensitive due to the uncertain economy and austerity measures.

The company also makes sure to adhere to ISO standards, which helps to solidify its name especially among German buyers. “Customers believe in our quality for they know that Zona truly works by-the-book from material spot-checking to pre-delivery inspection,” said Wu, adding proudly that each worker has been taught the importance of achieving the best quality.

The company won't be deterred amid the current downturn but is determined to focus on hard work and business development, just like other Taiwanese SMEs (small and medium-sized enterprises) who are known for fortitude and adaptability, said Wu.