L&L Machinery of Taiwan Targets US$1 Bn. Revenue in 3 Years via Diversification

L&L Machinery Co., Ltd., a major manufacturer of heavy-duty lathes in Taiwan, aims to generate revenue of some NT$1 billion (US$32.25 million) in three years with its subsidiary by diversifying into combo machining centers and machine tools to process large components for renewable energy equipment as windmills.

Such move takes the company out its comfort zone in which it operated pre-2008 financial downturn, according to company general manager, George Lin, whose company, founded in 1991, generated around NT$400 million (US$12.90 million) in 2013 revenue to equal that in 2012.

Before the 2008 downturn, the market was strong enough to absorb whatever we made. But when the market slowed after 2008, we have since 2011 been working with dealers to develop new solutions to help users maximize production efficiency, Lin stressed. 
 

An industrial engineering and management lecturer at the National Chin-Yi University of Technology and mechanical engineering lecturer at Hsiuping University of Science and Technology, Lin masterminded the corporate strategy. 

Lin said in recent years demands for machines to process super-long windmill shafts have surged due to simmering development of renewable energy worldwide, with such shafts being six, eight meters or even longer.

His company has released special computer numerical control (CNC) machines to process super-long hollow pipes for heavy-duty purposes, with one boasting five separate slideways.

In line with the diversification, the company will build a factory on two hectares at the Erlin campus of the Central Taiwan Science Park for some NT$250 million (US$8.06 million) to produce key components and assemble heavy-duty machine tools, with construction to begin 2015 and volume production in 2016 to  boost self content of key components to 60%, said Lin.

While most of its industry peers  in Taiwan have built mainly  machines for vehicle, household-appliance and hardware industries, L&L has focused on heavy-duty, special-purpose lathes since establishment, having introduced machines able to process workpieces as long as 16 meters for heavy-duty industries, including energy, aviation, and shipbuilding.

When Lin took over the family business from father several years ago, he started adding CNC capability to boost product added-value.

Moreover he began deploying its own production/operation management system to enable in-house design, product development, electro-control layout, and app software.

Such management system enables the company, with 80 workers including 12 R&D engineers, to shorten lead time (order receipt to delivery) to only 45 to 90 days, or only half that capable by most  Taiwanese competitors.

Lin emphasized service and innovation in its new phase. Speaking in perhaps lingo beyond comprehension of laymen, he said the firm addresses different needs of customers without meeting tailor-made needs, to instead meet the different and yet shared features of industries.

The company offers turnkey planning and after-sale service to both dealers and end-users, Lin said. 

 

A company that fails to adapt will lose customers but not all, and that competition in industry can not clearly show absolute results; while the goal remains to meet buyer's needs, Lin said.  

(KL)