Taiwan Tools Up As Market Brightens

With the global economy once again kicking into gear, manufacturers of machining centers in Taiwan saw both output and sales surge in the first half of this year, forcing many to work overtime to keep up with overseas demand.

The machining-center sector, the largest export category for Taiwan-made machine tools, seems to be continuing to gather momentum in the second half as price-conscious buyers come knocking in ever greater numbers. The demand pickup has been notable not only in Taiwan but also in other major markets including mainland China, Southeast Asia, India, and Pakistan, the U.S., Turkey, and Eastern European nations.

According to the Taiwan Association of Machinery Industry (TAMI), Taiwan exported more than 5,000 machining centers at an average price of US$41,200 per unit in the first five months of the year, generating total export sales of US$218 million, a 53% increase over the same period in the previous year.

The top export outlets for Taiwan-made machining centers were Hong Kong and mainland China, which together absorbed US$79 million, up 32.9% from the same period of last year and accounting for 36.2% of the island's total exports in the segment. Second place went to the U.S., which soaked up US$20 million in the same period, up 64.7% and accounting for 9.3% of the total, while Turkey ranked third with US$16 million, up 86.7% and accounting for 7.5% of the export total.

Other major export outlets included the Netherlands, Malaysia, Italy, South Korea, Thailand, the U.K., Germany, Spain, South Africa, Singapore, India, and Indonesia. TAMI vice president Wang Cheng-ching says that the top 15 export outlets for Taiwan-made machining centers accounted for 85% of the island's total exports of such products in the first five months. According to Wang, Taiwan was the world's largest exporter of machining centers in terms of volume during the period.

Market Leader

[right-20040930069-1.jpg] Fair Friend Ent. Group, one of Taiwan's leading manufacturers of computerized numerically controlled (CNC) machine tools, including machining centers, lathes and milling machines, says its produced 3,000 CNC machine tools at its plants in Taiwan, mainland China and Japan last year. It was the largest foreign-owned CNC machine tool manufacturer in the mainland last year.

The group turned out 600 machine tools in the mainland alone last year, about 20 to 30 times what most of its foreign-owned mainland-based rivals managed to achieve in the same period.

Already the biggest fish in the mainland, Fair Friend is now taking aim at the global leaders in its industry, according to Jimmy C.Y. Chu, the chairman. His company recently bought a 6.48 million-square-foot site in the Jiangdong Industrial Zone near Hangzhou of Zhejiang Province, mainland China to build a massive production complex with annual production capacity of 4,000 machine tools.

A decade ago, Fair Friend became one of the first machine tool makers to set up shop in Xiaoshan, Zhejiang Province. The group now has three plants there, including one recently inaugurated facility. The group has moved some production lines from its overworked second plant to the newer plant as part of a production streamlining plan.

The three plants in Xiaoshan have eight production lines able to turn out 50 machining centers and lathes per month. Fair Friend aims to produce more than 1,000 machine tools in the mainland this year.

In addition to its mainland production, Fair Friend can turn out 10 to 15 machine tools per month at its Japanese subsidiary, EMC Corp., 100 at its flagship Fair Friend Enterprise Co. in Taiwan, and another 80 at its Taiwan subsidiary, Leadwell CNC Machines Mfg., Corp.

Fair Friend acquired the financial-troubled Leadwell three years ago. After cutting staff and other costs, the subsidiary has reduced its debt to NT$200 million (US$5.86 million at US$1:NT$34.1) from an original NT$1 billion (US$29.58 million).

The group plans to establish five production zones at the Jiangdong production facility in Zhejiang Province, three of which will be used for processing mechanical parts, and two of which will be used to assemble machine tools.

The three production zones for processing mechanical parts will be used to produce parts for forklift trucks, elevators, and parking equipment needed by its affiliates. The other two zones are expected to turn out 4,000 machine tools in 2006. At that time, the group will be the world's third largest manufacturer of machine tools, trailing only Mazak Corp. of Japan, and Haas Automation Inc. of the U.S.

Chu says that his company's mainland operations have benefited from the growing presence of transplanted Taiwanese parts suppliers in the mainland over the past few years. With the guaranteed supply of key components, Fair Friend's mainland output has taken off over the past three years. The company has also transplanted its extensive manufacturing experience from Taiwan to mainland to boost production of high-quality machine tools there.

The company's growth has also been abetted by the recruitment of mainland-born talent, as well as by the company's comprehensive customer support and marketing networks in the mainland, Chu says. Over the past few years Fair Friend has set up 17 representative offices covering all major regions of mainland China.

Vertical Growth for Horizontal Lathes

[left-20040930069-2.jpg] Founded in 2003 in central Taiwan, Campro Precision Machinery Co., Ltd. Is a young company with a highly experienced management team. The company produces CNC horizontal lathes, CNC vertical machining centers and other CNC machine tools at factories on both sides of the Taiwan Strait.

Campro currently offers four models of CNC horizontal lathes and seven models of CNC vertical machining centers, says company president Tsai Ching-tse. The company can roll out 15 to 20 CNC machine tools in Taiwan and another 12 in mainland each month.

The machining centers supplied by Campro boast X-axis travel of 900mm to 2,200mm. The 900mm X-axis travel model is its most popular item.

Over the past year, Campro has focused on the Taiwan and mainland Chinese markets, but as its production capacity grows the company is now turning its attention to export markets. "Our products are warmly welcomed in Taiwan and mainland because of our low prices and consistently high quality," notes Tsai. "I believe these same qualities will help us to succeed in other markets as well."

In addition to its pricing and quality attractions, Campro backs up every machine with comprehensive after-sales support services.

At present, the company sells most of its machines under the "Campro" brand, but it also welcomes original equipment manufacturer (OEM) orders.

Upgrading to CNC

[left-20040930069-3.jpg] Frank Phoenix International Corp. was founded in 1990 as a manufacturer and exporter of conventional machine tools, such as mold-making lathes, grinders, and milling machines and their related accessories. In 1995, the company teamed up with several partner companies to expand into the manufacture and sales of more sophisticated CNC milling machines and CNC lathes fitted with locally made and imported industrial controllers.

In 1997, Frank Phoenix began cooperating with the Mechanical Industry Research Laboratories (MIRL) under the semi-official Industrial Technology Research Institute (ITRI) to jointly develop a series of advanced IPC-based CNC controllers.

Chief executive Frank Lin says his company continued its expansion with the 1999 acquisition of Topfit Machinery Co., a CNC milling machine, CNC lathe, and machining-center specialist.

In the same year, Frank Phoenix debuted an upgraded series of CNC milling machines, the FM-205/255/300 CNC/MH/ATC, featuring more precision specifications, a wider application range, and greater durability.

About four years ago, the company developed a direct-coupling transmission-milling device to accelerate the feeding speed of its CNC milling machines to match the performance of regular machining centers on the highly competitive market.

Frank Phoenix is also developing a new bed-type CNC milling machine outfitted with Windows NT-based high-speed, high-precision CNC controllers.

Another new item from Frank Phoenix is a gantry-type mini CNC milling machine, which the company claims is its most economical, high-performance, space-saving unit available for metal and non-metal milling and engraving work.

Recently the company introduced the FM-395ATC CNC series of machine tools, each featuring a vector-type inverter for variable spindle-speed operations to ensure accurate and stable running, one-piece rigid-bed casting for heavy cutting, and a PC-based color IM20/IM20H CNC controller for increased convenience of operation.