GSA Technology Launches New Expansion Plans in Taiwan and China

Rotary table and turret maker targets becoming top-3 and to go public in 3 years

Compiled By KEN LIU

GSA Technology Co., Ltd., the No.1 manufacturer of rotary tables and turrets for computer numerical control (CNC) machine tools in the Greater China region that is based in Fengyuan District, Taichung City of central Taiwan, has inaugurated new expansion plans on Taiwan and mainland China, aiming to be among the world's top-3 suppliers in the sector and to go public in Taiwan in 3 years.

Last year, the company began constructing a factory on 18,150 square meters of land at the Central Taiwan Science Park with initial expenditure of around NT$600 million (US$19.35 million). The factory, scheduled to be completed by 2016, is designed to build high-end rotary tables and turrets for CNC lathes for markets outside mainland China with planned output value of around NT$4 billion (US$129.03 million).

The company began volume production of CNC rotary tables and lathe turrets for the mainland Chinese market in late 2014 at a 23,100-sq.m. factory in an industrial park in Jiashan County of Zhejiang Province. The new factory, being the first phase of GSA's expansion plan at the park, cost the company around NT$600 million in investment and is designed to have annual output value of NT$3 billion (US$96.77 million).

These expansions are estimated to boost corporate consolidated revenue to NT$4 billion by 2017, up from 2014's NT$2.5 billion (US$80.64 million), according to company chairman, J.K. Yu.

Yu says his company has been vigorously developing huge rotary tables in recent years for machines processing automotive, watercraft, energy-equipment, and aircraft components to keep up with robust demand from these industries, with 3-meter diameter tables for CNC machines having been rolled out in 2014.

Such rollout further widens the company's product lineup to cover products ranging from 10 centimeters to 3 meters.

With its brand “GSA+” promoted in 40-plus nations, the company is already among the world's top-3 branded supplier of rotary tables.

For the company's CNC turret business, Yu plans to increase sales of branded products with the goal of snatching 30 percent of the brand-name market each in China and Taiwan. For quite some time, the company has been known for its original equipment manufacture (OEM) and original design manufacture (ODM) turrets, which are ordered by globally leading CNC machine makers including 5 of the Japan's top-10 makers.

GSA Technology builds products at plants in Taichung, central Taiwan; Shanghai, mainland China; and Bangalore, India, coupled with a marketing office in Japan.

Yu reveals the company's formidable competitive edge as high quality products that are sold at 20 percent discount to those built by big international players, an achievement realized mostly by the company's awareness of the importance of advanced machine tools, which are upgraded by adopting products from industrially advanced nations as Germany and Japan.

The company has cut lead time to less than a month, or around two to three weeks shorter than that of most competitors, having also halved inventory backlog of finished products and semi-finished products by borrowing from the theory of constraints (TOC), a management philosophy introduced by the Israeli scholar Eliyahu M. Goldratt who views any manageable system as being limited to achieve more of its goals by few constraints.

Compared with many of his industry peers on the island, Yu is less worried about intellectual resource given his company's attractive corporate apprenticeship program, which offers interns from National Chin-Yi University of Technology (UCUT) and Hsiuping University of Science and Technology NT$35,000-40,000 (US$1,129-1,290) throughout training. Enticed by guaranteed starting salary of NT$40,000 a month, nearly 90 percent of interns usually choose to stay after graduation. The said schools are near the company's headquarters in Fengyuan, central Taiwan.

Diligently sharpening its competitive edge, the 1978-founded GSA in 1988 became Taiwan's first rotary-table maker to win the MCS certificate, a quality certification system set up by the government-backed Industrial Technology Research Institute (ITRI) under the Ministry of Economic Affairs (MOEA).

Offering high quality has since 2004 enabled GSA to win OEM contracts from Japan for servo-driven turrets used in milling machines and lathes.

The company takes after high-end Japanese factories to make all its products in air-conditioned settings to provide excellent manufacturing quality, which has enabled the company to swiftly emerge from the latest business downturn thanks to steady orders from mainland China and Japan.

Yu, concurrently the vice chairman of the Taiwan Machine Tool & Accessory Builders' Association (TMBA), says the island's machine-tool makers are struggling under unfavorable appreciation of NT-dollar against U.S. dollar, to have considerably eroded their export competitiveness when Japanese yen and South Korean won have devalued sharply, as well as the Free Trade Agreement (FTA) that South Korea has signed with leading economies including the United States, mainland China, European Union, the Association of Southeast Asian Nations (ASEAN), and India.

He urges the Taiwan government to devalue the NT-dollar and expedite signing FTA with major nations to secure Taiwan's status as the world's No.3 machine-tool exporter employing nearly 300,000 workers island-wide.