Taiwan Hand Tool Industry's Output Value Grows Moderately in Q3, 2012

Industry turned out NT$16.38 billion in hand tools in the quarter, up 2.1% QoQ

Amid widespread decline of Taiwan's exports, the hand tool industry however saw output grow moderately in the third quarter of 2012 to stay in comparatively good shape.

According to the latest report by the Metal Industries Research & Development Centre (MIRDC), a local R&D and market research institute, the industry turned out NT$16.38 billion in hand tools in the quarter, up 2.1% from the second quarter or 2.2% over a year ago.

The industry's exports totaled NT$15.74 billion, down 4.7% quarterly or 0.9% yearly, with imports of NT$1.06 billion, down 7% from a quarter ago and 11.3% year-on-year, according to the MIRDC report. During the same period, demand in Taiwan totaled NT$1.7 billion, 62% met by imports, and 96% going overseas, which, MIRDC's senior analyst noted, shows the industry's re-exporting trade remained on an uptrend.

Industry Headlines

The procurement conference, initiated by the Bureau of Foreign Trade under Ministry of Economic Affairs and organized by Taiwan External Trade Development Council (TAITRA) with the aim to help local suppliers of hardware, hand tools and oil seals to attract orders from foreign buyers, perhaps has injected positive momentum into the industry.

According to TAITRA, the conference, rounded off on October 18, 2012, attracted 17 buyers from 12 countries and 78 Taiwanese companies to meet personally. Of the invited buyers, heavyweights with annual sales exceeding US$10 million included Premium, a Russian importer of hand tools with annual revenue of over US$600 million and Dong Shin TTM, one of Korea's top three hand tool suppliers.

The organizer claimed that the procurement conference helped to realize business opportunities of US$20.3 million between foreign and local participants, enabling some of Taiwan's larger hand tool companies as Mobiletron Electronics Co., Ltd., an auto electronics and auto report tool supplier, and Kuang Yuang Industrial Co., Ltd., a veteran maker of pliers and wrenches, to benefit, MIRDC analysts said.

The government's plan to revitalize traditional industries brings more good news to Taiwanese tool makers developing digital models, added the analysts.

The plan calls for the government to budget NT$10 billion in the next five years to help over 50 traditional manufacturers, service providers and crop growers in product upgrading, aiming to develop five globally competitive brands among the chosen companies. This is expected to create 25,000 jobs, additionally generate NT$200 billion in Taiwan's exports, and solicit private investments valued at NT$50 billion in the near future.

Digital tools that include stylish LED lighting, smart bathroom fittings, household appliances etc. are among the 12 most promising products to lead industry growth in the plan. MIRDC analysts indicated that this will hopefully motivate more Taiwanese tool makers to develop digital tools to drive industry output value and boost its global profile, given that such products call for higher technologies to produce than conventional models but generate higher margins.

THS 2012

Taiwan Hardware Show 2012 remained one of the major highlights of the industry, said the analysts, considering the annual trade fair saw steadily rising turnout to help hand tool and hardware suppliers build business.

The show, wrapped up on October 13 at the Taipei World Trade Center Exhibition Hall 1, drew 21,636 visitors from 58 countries during the three days of exhibition, showed a 17% growth compared to 18,461 of the last edition. Participation by executives and procurement managers of internationally larger enterprises from Japan, Germany, Brazil, Iran, United Arab Emirates and Czech Republic added to the significance of the show.

Nearly 300 exhibitors took part in the 2012 event, with hand tool suppliers making up the majority, including Allprofessional Mfg. (snip cutters), Casemate Plastics International (tool cases), Infar Industrial (wrenches), A-Kraft Tools Manufacturing (original equipment manufacturing), Lucky-Brand Industrial (hammers), Re-Dai Precision Tools (ratchet handles), Savco Corp. (bit holders), Yih Cheng Factory Co., Ltd. (screwdrivers), Stand Tools Enterprise (digital torque wrenches).

Cautious Q4 Outlook

With persistently uncertain global economy coupled with growing worry about economic slowdowns in the U.S. and China, MIRDC analysts pointed out that most Taiwanese hand tool makers have been cautious about business since the second half of 2012, hence projected the industry's output to show flatter growth in the fourth quarter compared to a quarter ago.

Output of Taiwan's Hand Tool Industry

Unit: NT$1 billion

Period	2011		Q2, 2012	Q3, 2012			2012 (forecast)
	Value	YoY Growth	Value	Value	QoQ Growth	YoY Growth	Value
Output	61.80	5.15%	16.29	16.38	2.2%	2.1%	59.05
Imports	4.76	4.20%	1.21	1.06	-7.0%	-11.3%	4.05
Exports	59.36	9.97%	15.08	15.74	4.7%	-0.9%	56.05

Source: Metal Industries Research & Development Centre