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Taiwan's Suppliers of Woven Bag Making Machines Take on Underselling Rivals

Manufacturers use product diversification, top quality, and good service to sustain growth

2013/04/08 | By Steve Chuang

Woven bag circular loom manufacturing is an important part of Taiwan's globally competitive machinery industry, but in recent years operators in the line have been disturbed by underselling rivals in emerging countries. Woven bag circular loom production on the island has contracted as a result, and manufacturers are employing a variety of strategies to attain sustainable survival.

In this article, three of Taiwan's prominent suppliers of woven bag making machines—the Jenn Chong Plastics Machinery Works Co., For Dah Industry Co., and Sencar Machinery Co.—shed light on what the manufacturers are doing to survive and thrive in the increasingly challenging global market.

Jenn Chong’s JC-3CX Multi-Layer Co-extrusion Blown Molding Machine won first prize in the innovation contest held during Taipei Plas 2012.
Jenn Chong’s JC-3CX Multi-Layer Co-extrusion Blown Molding Machine won first prize in the innovation contest held during Taipei Plas 2012.

Broadening Lineup
Jenn Chong's general manager, Tony Wang, says that his company is drawing on more than 20 years of experience in plastic extrusion to sidestep the cutthroat competition by broadening its product line.

“Jenn Chong began by producing flat yarn making machines along with plastic extruders and blown film machines,” Wang notes, “but then was vexed by the rise of Chinese and Indian competitors who took advantage of lower production costs to underprice their machines globally.” He went on to say that this situation gradually drove most Taiwanese suppliers from the market.

Jenn Chong was undaunted, however, and decided to apply its accumulated knowhow to expand its product lineup from flat yarn making machines to other machines for woven bag manufacturing, including nylon monofilament machines and fibrillated yarn machines. Wang claims that only a few Taiwanese suppliers are capable of developing and producing monofilament-related machines, which require a relatively high level of technology.

Its expanded product portfolio, Wang says, allowed his company to extend its reach into other segments; the resulting sales enabled the firm to keep in comparatively good shape in 2012, when Taiwan's machinery industry as a whole experienced gloomy performance.

The JC-EcoTrim Edge Trim Reclaim System was awarded for its eco-friendly features and improved exterior design.
The JC-EcoTrim Edge Trim Reclaim System was awarded for its eco-friendly features and improved exterior design.

Continuous Improvement
Even as it develops new machines, Jenn Chong works on improving the performance of existing models. Wang says that nearly all of his staff, from R&D engineers and sales agents to operators and electricians, are involved in R&D aimed at improving performance, and that such full participation enables the company to work out improved machines that meet market needs and are perfectly suitable for customers' production lines.

For instance, Wang says, the company builds beefed-up servo motors and fully automatic control into its monofilament machines, meeting the market trend toward energy-saving, high-performance machines that can minimize the generation of waste throughout the production process. This strategy obviously works, since the company has enough orders to keep its production lines humming through May.

Another affirmation of the firm's devotion to innovation and quality were awards granted Jenn Chong's JC-3CX Multi-Layer Co-extrusion Blown Molding Machine and JC-EcoTrim Edge Trim Reclaim System for their beefed-up performance and aesthetic design at Taipei Plas 2012, a world-class trade fair for plastic and rubber machines that was held on Sept. 21-25 last year.

Jenn Chong's R&D efforts are not aimed at filling customers' requirements alone; they are also inspired by its partners. Wang reports that his company has been developing machines that can handle high transparent shrink films made of PE because its upstream supplier, Dow Chemical, suggested that such films are eco-friendly and have no need for printing.

“We are now developing more cutting-edge machines that can be used in other fields, as well as researching new yarn and monofilaments,” says Wang. “Jenn Chong's core competence is R&D, which is always driven by customers and market trends.”

Wang adds that part of his strategy for this year is to participate in more overseas trade fairs, including those in Mexico, China, and Southeast Asia, to boost the company's exposure to new customers.

For Dah is a seasoned supplier of woven bag making machines.
For Dah is a seasoned supplier of woven bag making machines.

Whole-plant Solutions
Despite a depressed industry, For Dah, a 42-year-old supplier of woven bag making machines in Chiayi County, central Taiwan, managed to chalk up a revenue growth of more than 30% in 2012 thanks mainly to strong shipments of whole-plant equipment, according to sales manager Vivian Lee.

“For Dah started to supply whole-plant equipment about 20 years ago, becoming one of the first companies in the field to use this method of dealing with underselling competition,” says Lee. “We now have customers from all around the world who have complete faith in the quality and performance of our whole-plant equipment, which have contributed around 70% of our total revenue in recent years.”

For Dah can independently supply nearly all kinds of single machines for woven bag production lines.
For Dah can independently supply nearly all kinds of single machines for woven bag production lines.

Market changes also help For Dah to competition more evenly with underselling rivals. Lee explains that global buyers once sourced heavily from underselling suppliers in search of the lowest possible cost following the global financial tsunami, but in recent years most of them have turned back to Taiwan because they are willing to pay more for higher quality. This affords a good opportunity for For Dah to strengthen the promotion of its single machines and whole-plant equipment, especially to buyers from emerging markets.

“For instance,” Lee comments, “our shipments to Africa and Southeast Asia have surged significantly in recent years, primarily because buyers there generally have tight budgets; our machines, with their high quality and excellent performance-to-cost ratios, can be the best choice for them. Mostly, they come to us on their own initiative, thanks to our reputation, in search of good printing machines and flat yarn making machines to built into efficient woven bag production lines in their home countries.”

Sencar has shifted its focus to extrusion laminators as part of a strategy for competing with rival suppliers.
Sencar has shifted its focus to extrusion laminators as part of a strategy for competing with rival suppliers.

Consummate Technology
In addition to its solid reputation, For Dah's success is built on consummate technology, Lee says, adding that the firm is now one of only a few Taiwanese woven bag making machine suppliers able to supply whole-plant equipment independently. After decades of pursuing top quality and functionality, she notes, the company has strong woven cloth processing capabilities and superior technologies, as well as a full understanding of how to help customers bolster their added value using its machines and whole-plant equipment.

“For Dah has experienced staff who can precisely solve problems, as well as the flexibility in production we need to satisfy customers with value-added machines and services,” Lee comments. Further, to provide timely technological support and post-purchase services, the company maintains offices in Central America, Russia, Egypt, and Indonesia, along with a representative office in Africa.

A technology-driven supplier, For Dah can shrug off the cutthroat competition from underselling rivals in the global market, says Lee, who adds that it is a strong commitment to the improvement of manufacturing technologies and methods that gives her company a strong competitive edge over emerging rivals.

“The orders that we received in January through February already amount to one-third of the total for last year,” Lee says proudly. “That makes us even more optimistic about our prospects this year; and gives us confidence that our efforts toward technological development and innovation are correctly directed.”

Sencar’s Double Side Release Paper Laminator is one of its best-sellers.
Sencar’s Double Side Release Paper Laminator is one of its best-sellers.

Shifting Focus
Like most of its peers, Sencar, founded in 1985 in the northern Taiwan city of Taipei and dedicated the production of extruders and woven bag machines, decided to shift its focus to other types of machines that might help it carve out niches in the global market. General manager Angela Hsueh reports, however, that the company is also keeping up its original woven bag machine business.

One example of this shift is the Double Side Release Paper Laminator, which is designed specially for coating and laminating various kinds of industrial kraft paper (including packing kraft paper) and adhesive tape. It is combined with a silicon coating and adhesive coating machine.

Hsueh says that her company specializes in extrusion laminators and co-extrusion laminators along with woven bag making machines, and that its laminating and coating machines are widely used in the production of non-woven fabric products including baby diapers, woven sanitary pads, hospital isolation clothing and medical supplies, commercial labeling paper, T-bar advertisement paper, and cosmetic & food packaging materials. This provides the company with a new growth engine.

At a time when the woven bag machinery industry has come to be dominated by emerging rivals, the use of its core competence to launch the laminator machine line seems to be a smart move for the company.

Hsueh feels that another element in the company's competitive advantage is professional and timely customer services—an important factor, especially given the fact that laminating and coating machines are generally not as easy to operate as ordinary extrusion machines but are commonly needed to ensure high precision. These services help customers to fine-tune their machines to meet their specific requirements and standards.

“Our laminator and coating machines have been well received in China and other Asian countries like Malaysia, Indonesia, Thailand, India, and Bangladesh, as well as Russia, Spain, Italy, and South America,” Hsueh says, implying that good service is a big reason for this success.

She goes on to note that the company is also vigorously promoting other machinery, including a high-speed auto splicing system with an improved programmable logic controller (PLC) for all-line synchronized operation, enabling customers to assure their production lines roll smoothly without the need of a large workforce.