OHLA plastics Co., Ltd., established in the central Taiwan city of Taiping, Taichung County in 1989, supplies plastic and metal parts and accessories for the furniture industry.

Five years ago the company moved into a new 28,000-square-foot plant with integrated production capabilities. The company says only the most advanced management techniques are used at the plant to boost productivity and quality.

Of concern of late for OHLA management are continuously rising prices for raw materials, including plastics, iron, and steel. Iron and steel, polypropylene (PP), acrylonitrile butadiene styrene (ABS), nylon, and polyethylene (PE) are the main materials used in its furniture parts, and all have become dearer in recent times. "The market is too competitive for us to raise prices and recoup the higher costs," laments Chiang Ching-Shih, president of the company. "But we have made every possible effort to keep costs down by streamlining our production processes over the past several months. If prices for raw materials doesn't rise too sharply in the future, I believe we will weather this tough time."

OHLA's strategy for success against cheaper mainland Chinese rivals has been to focus on a wide array of self-developed niche items with higher margins.

Plastic-injection molding parts and DIY (do-it-yourself) iron-pipe screws are two of OHLA's major product items. Other major products include casters for office chairs, most of which are exported.

Chiang says that as a 30-year veteran in the plastic and metal parts industry, he knows how to quickly spot evolving market demands and turn out items that meet them. For example, he can help customers reduce procurement costs by singling out appropriate materials for use in the items they order from OHLA. "Some customers are used to using specific high-price materials," says Chiang. "But I know how to help them reduce costs by using cheaper materials without compromising the quality of their products."

OHLA works with domestic providers of high-end surface-treatment services to produce high-end metal parts. "Due to our long-term business relationships, these providers can offer cost-effective services to us," says Chiang. "This helps us to achieve high quality at a low cost. Anyone who wants to procure price competitive plastic and metal parts for the furniture industry will find we can provide such services in Taiwan, rather than in mainland China."

Hand Tools

The strong support of surface-treatment providers in Taiwan has also eased OHLA's recent entry into the hand-tool market, including screwdrivers, socket wrenches, and bits. Chiang says his firm has received several big-ticket orders from home and abroad, attesting to the success of the company's focus on high-quality products.

In order to meet the rising demand for its hand-tool line, OHLA is thinking of setting up a new plant near its current factory. The company estimates that the new production site will come on-line within the next two years.

Although the overseas market is much bigger than the domestic one, Chiang says that his company won't sell its innovative plastic parts to foreign markets so as to protect the interests of its domestic customers in the furniture industry. "Our sales growth over the past decade owes much to our domestic customers. To enter the wider global market, we have started production of hand tools and expect this to become one of our major products in the next few years."

Chiang says his company will begin more aggressively promoting sales of its hand tools next year. "We have established a good environment for the production of hand tools through research and development work over the past year," says Chiang. "For instance, one of the handles of our screwdrivers has been patented in the U.S., and we are waiting for approval of several other patent applications."

In addition to entering the hand-tool market, OHLA has been developing innovative plastic parts for the furniture industry since its establishment. The company also welcomes original designs from customers. "By cooperating with foreign manufacturers, we can effectively expand our line of plastic parts and meet the needs of the international market," Chiang says.

Seeing the booming demand for surface treatment services in the mainland China, OHLA and another Taiwanese company have set up 50-50 joint venture firm in Kunshan, Jiangsu Province to provide such services. The company has just opened a new plant specializing in metal-surface treatment. According to Chiang, the plant uses the most advanced Taiwanese technology in the field of surface treatment. "As Taiwanese technology in surface treatment is highly regarded around the world, our involvement in this field in mainland China will, I am fully confident, help us generate considerable profits in the next few years."