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Formula Engineering Inaugurates New Plant in Central Taiwan

2012/04/27 | By Quincy Liang

New factory integrates production and raises management efficiency

Further consolidating its lead in the bicycle-hub and wheel-system production globally, Formula Engineering Inc. of Taiwan, recently inaugurated its new factory in the Feng-Chou High-Tech Industrial Park (FCIP), Taichung, central Taiwan, with various industry executives in attendance, including Tony Lo, CEO of Giant Manufacturing Co., Ltd., Michael Tseng, president of Merida Industry Co., Ltd., John Burk, president of Trek Bicycle Corp.

Formula globally markets high-end bike hubs under its own "Formula" brand and wheel systems under the "Xero" brand.

Spread across 8,300 square-meters with total floorage of 17,500 square-meters, the new plant has a five-floor office building (3,150 square-meters), a four-floor production building (12,900 square-meters), and will help integrate production as well as significantly raise production, management efficiencies, with the enhanced logistic convenience, improved production/personnel safety also to elevate the maker's competitiveness.

The new facility enables Formula to achieve integrated production, turning out under one roof bicycle hubs, welded rims, spokes, brass and alloy nipples, skewers, wheel systems, carbon-fiber composite products, and high-precision machined items (by five-axis machining centers). Such integrated capacity has been realized by installing numerically-controlled lathes, three- and five-axis milling machines, wheel-system assembly machines, hub assembly and testing machines, carbon-fiber forming machines, coordinate measuring machines, compact roundness inspection instruments, and others.

The new plant helps to sustain stable revenue growth, achieved by raising the proportion of technologically-intensive, high-precision products made by five-axis machine centers, composite-material products (carbon-fiber and special-alloy products), and value-added items (ODM wheel systems, four-bearing hubs etc.), said the maker.

In addition, the new factory has also raised Formula's overall production capacity, with 15%-20% capacity increase for hubs (with two new production lines), 20% for rims, and 10%-15% in wheel systems.

Accessibility

The new plant has the added advantage of being strategically located, being at the hub of several highways and express roads that are linked to airports and harbors. More importantly, central Taiwan is the manufacturing citadel of bicycles, parts and accessories, also home to many high-precision subcontractors.

A well planned and designed industrial zone in central Taiwan and governed by the Taichung City Government, the FCIP is home to many long-established enterprises; while most of Formula's employees live nearby, which addresses the issue of commuting that may cause high staff turnover.

Michael Tseng, president of major cycle brand Merida, congratulated Formula during the inauguration for successfully expanding operation over the past 17 years, also highlighting the plant's modern manufacturing equipment, production-line planning, the sylvan campus, eco-features to make the new factory a dream complex.

Tseng also praised Formula's global success with its Formula-branded hubs and Xero wheel systems, as well as the firm's key role in the A-Team, an industrial alliance of bicycle and parts manufacturers in Taiwan to explore the high-end bike market, to always pull ahead of the other team members in the Toyota Production System, Total Quality Management and Total Productive Maintenance to live up to its reputation as a potential star in the global bicycle industry.

Background

Founded in 1994, Formula designs, manufactures bicycle hubs, rims, spokes and skewers for many well-known brands, achieving a solid reputation for high quality by supplying the finest items.

Formula believes the hub is the heart of a wheel, so adheres to such motto to make a hub as good as a wheel. It always keeps in mind riders' needs to build hubs that are easy to maintain, replace and durable.

In 2001, the company discovered that most wheels are actually made up of parts designed by various engineers and made by different contractors, which drove the maker to venture into wheel-system development and production by launching the Xero brand, whose key parts the maker now produces, while the maker's strong R&D has been creating cutting-edge products.

Transformation

Mark Yu, chairman of Formula, said that it has been an uphill battle in the last 17 years in the hub-making business, during which Formula has been gradually building integrity with partners, working with brands to create new technologies and improving, growing together, to finally become Taiwan's only wheel-system manufacturer with complete design, manufacturing capacities and in-house testing and certification.

Formula used to be an original equipment manufacturer (OEM) but has upgraded to a major ODM, working productively with many international customers. “I want to share with everyone Formula's most important experience, lesson learned from our cooperation with international major bicycle brand Trek over the past 10 years: building mutual-trust is the core to success! As long as we keep our word, we can find the energy to grow. And only through partnership can Formula achieve what we have,” said Yu at the inauguration.

Formula is a founding member of Taiwan's A-Team founded 11 years ago, Yu said, and all the A-Team members have greatly improved management and operational skills by mutual-learning, with the A-Team having played a vital role to pull Taiwan's bicycle industry from its abyss in 2003, recreating a strong foundation to keep high-end bicycle production in Taiwan.

To answer the potential question why Formula chooses to construct a new factory at this time in Taiwan, Yu said that it is to increase usage of more advanced techniques, technologies in Taiwan to add value to locally-made items, which can allow the maker to be better equipped to take on challenges. “Differentiating technologies enable us to sharpen competitive edge and share with our factories in China, helping us better compete in the growing Chinese market. Hopefully our new plant inspires similar investments to strengthen the roots of high-end bicycle manufacturing in Taiwan,” added Yu.

Formula plans to break ground for another facility in Kunshan, Jiangsu Province, China, Yu said.