Faucet Makers in Taiwan Make History by Setting Up Trade Association
2009/05/07 | By Steve ChuangOver the past half century, over 80% of Taiwan-based faucet and sanitary ware makers have been clustered in Lugang Town, in central county of Changhua, making the small community likely ground zero in the sector.
The "cluster effect" typically refers to buyers and sellers in a certain industry congregating in a certain place, like Hollywood for the American filmmaking industry, and hence inducing other buyers and sellers to relocate there as well. But in Lugang Town and its sanitary ware makers in Taiwan, the cluster effect likely relates to the grouping of various makers along the supply chain, not buyers of complete products, who are mostly from abroad.
More than 150 upstream and downstream firms in Changhua are members of the Association, with Wu Feng Enterprise's general manger C.C. Chen being the chairman. With Wu Feng being one of the most experienced OEMs (original equipment manufacturer) of brassware in the county, Chen and his 37-year experience are expected to help build global presence for the trade group.
Birthplace
Without specifically attributing a cause, Chen says that Taiwan's faucet and sanitary ware sector originated in Dingfanpo, Lugang, a key seaport for immigrants in the nation's early days, where the sector has become the most prominent after some 50 years of development in the community, where an integrated supply chain has formed with over 1,000 makers, including surface finishers, material suppliers, processors, and specialized machinery makers.
"Changhua boasts the highest distribution of faucet and sanitary ware makers globally, exceeding that in Italy and Japan, where similar clusters also exist," Chen states. "Taiwan exports NT$60 billion (about US$1.875 billion at US$1: NT$32) of faucets and related products annually, of which some 80% are from Changhua." So the figures fully speak for the county's importance in the sector.
Realizing the weighty role of the sector for Taiwan, the Ministry of Economic Affairs and government-funded ITRI, have, since 2007, been working on a 3-year project to assist local makers to upgrade technologies to sharpen global competitiveness. This has helped world-caliber companies as Wu Feng, Chuan Wei Metal, Chang Yi Shin, Sheng Tai Brassware, Torng Jng Guan and Sanitary Equipment. In only a year, the project encouragingly has realized technical breakthroughs in surface treatment, mold development and IR (infrared) faucets and related applications, attracting more to come aboard.
Chen strongly believes that a formal trade association representing the traditional industry would garner more official respect and attention, especially when the current global downturn has taken the thunder out of erstwhile high-flying cash-cows as the semiconductor and other electronic sectors.
Objectives
The CWWIDA, among other objectives, will serve as a platform for its members to share up-to-date market information and know-how, which will help them hone competitiveness as they participate in global trade fairs, Chen says.
The Association has been working with the Mechanical and Systems Research Laboratories of ITRI to automate gravity casting, widely adopted in Europe, to try to introduce such methodology to Taiwan. Justifying the merits of gravity casting, which is still prevalent in Taiwan, Chen says that the technique better assures quality, relative to sand casting, by minimizing surface porosity, improving dimensional precision and production efficiency.
Another incentive, Chen adds, to automate casting factories is the "gentrification" of the work environment. Simply put, "not many fresh college grads are attracted to manual laboring with sand and dirt in a traditional factory." Automated gravity-casting lines means a cleaner, easier work environment that can lure younger staffers, which is absolutely positive for the whole industry.
Also, the Association is helping members to meet international standards. Citing the American NSF (National Sanitation Foundation) Standard as example, Chen says that the member factories will be taught to apply lead-free materials to produce NSF-certified faucets and related products to be sold stateside, mainly because by 2010 all imported faucets must be NSF labeled to show total compliance. In other words, the Association is the faucet, sort to speak, of new information and knowledge for its membership.
Co-branding
Having survived independently in the global market for a few decades, but increasingly challenged recently by emerging rivals, Taiwan-based faucet and sanitary ware makers are relieved to be served not only by the newly-formed trade association, but also perhaps its grandest goals: to help local suppliers build global presence by polishing to a higher gloss their promotions at international trade fairs.
One approach being mapped out to achieve the above, with Chen discussing with the Taiwan External Trade Development Council (TAITRA) and ITRI, is the possibility of co-branding "Water Ware" as the collective face of Taiwan-made faucets and related products at global shows starting 2009. Chen says that such co-branding would help local makers, who are more prudish producers than global promoters, to impress foreign buyers and go upmarket more effectively.
To weather tougher global competition due partly to dumping and partly to the global financial fallout, Chen says: "local suppliers have to enhance global presence by participating in international trade fairs, and, above all, tap teamwork instead of individualism."
Unwilling to wait for Chen, TAITRA and ITRI to make progress on the co-branding idea, Chang Yi Shin's chairman Wang, also a supervisor on the board of the CWWIDA, recently formed a 5-company co-branding team, with Chang Yi Shin (IR faucet), YO Bronze Enterprise (brass valve) and Taiwan Lung Pao (stainless steel basin) as members, who has successfully acquired an official subsidy to debut its co-brand (still being designed) for the 2009 KBIS (Kitchen/Bath Industry Show & Conference), scheduled for April 30 to May 3 in Atlanta, Georgia.
World-caliber IR Faucet
Wang's confidence to leave the starting block earlier than its local counterparts lies in its CYS210 series IR faucets and newly-developed water-recycling power generation system, which feature TOTO technologies, a reputable Japanese brand in Taiwan. The Chang Yi Shin chairman notes that his company has not only innovated the integration of rechargeable lithium batteries into the system to improve power-supply stability but also shrewdly avoided violating TOTO patents. The CYS210 faucet actually proves that Taiwanese makers can develop world-caliber IR faucets featuring green power generation systems.
The Chang Yi Shin 5-member team and its co-branding plan have a more focused target-aiming to promote Taiwan's IR faucet sector by clustering suppliers of finished products, parts and related services. Wang echoes Chen's belief that Taiwanese makers must sharpen global competitive edge by integrating the supply chain and financial resources.
"It's critical for Taiwan-based makers to stop competing among ourselves in the global market, but work as a team," Wang stresses, "our 5-member team aims to work the co-branding idea, though uncharted territory but will create cohesiveness. If the plan works, we will expand membership to amplify the cluster effect."
Paying Tribute
Less to do with business than preserving the history of the sanitary ware sector in Dingfanpo, the birthplace of the sector in Taiwan, the Lugang Town administration has been planning to build the "Water Ware Museum." Chen says, with the tone of a father who has seen the maturation of his own livelihood, that the museum would pay tribute to an otherwise obscure town and its significant role as bread winner for thousands, as well as a sizable foreign exchange earner over the decades.