Kitchen and Bathroom Accessories Manufacturers Survive in Taiwan By Going Upmarket

After more than two decades of development, Taiwan's kitchen and bathroom accessories industry has transformed itself from contract manufacturing to original-design manufacturing (ODM). Many producers in the line are able to design innovative products to meet the diverse requirements of customers from all over the world, and some have even succeeded in promoting their own brand names in high-end markets.

Top manufacturers offer innovative items characterized by streamlined design, convenience, and environment-friendly production processes and operation. High-grade materials such as stainless steel are often used in upmarket products.

Domestic manufacturers are plagued, however, by such problems as skyrocketing prices of iron and steel-the main materials used in making kitchen and bathroom accessories-and price competition from developing countries, especially mainland China.

There seems to be no end in sight to the iron and steel price hikes, thanks to increased global demand, but many of Taiwan's manufacturers have responded to price competition from China by moving production facilities there in search of lower production costs. Some manage to survive in Taiwan, however, by upgrading their manufacturing skills and focusing on high-added-value, multifunctional, high-quality product lines.



Design and Marketing Focus

One company that has chosen to go both ways is Decorway Co., headquartered in the northern Taiwan county of Taipei. The company concentrates on the design and marketing of innovative iron-wire and metal-related products, mostly for kitchen and bathroom use, and has invested in several joint-venture plants in Taiwan and mainland China.

The company boasts that it is capable of developing a wide range of high-quality kitchen and bathroom utensils for customers from throughout the world. Currently, its main product lines are wire shelving systems, kitchen and bathroom organizers, display and shop fittings, wire rank and forming products, wire mesh products, and wire-formed decorative lighting.

A dedicated in-house R&D team guarantees that the company's products will have sophisticated designs and high quality. This capability, plus rapid delivery, has enabled Decorway to establish long-term relations with many of its customers.

Most Decorway products are sold through boutiques in industrialized countries such as the United States, the United Kingdom, and Germany.

"We have four talented in-house designers who develop innovative products in accordance with the latest world fashions, " reports Steven Lin, the company's general manager. "It's time for manufacturers in Taiwan to focus on products with new designs instead of those mass-produced items, because our rival manufacturers in mainland China can beat us at mass production. In this situation, it's obvious that Taiwanese manufacturers have to distinguish their products from those made in the mainland."

The company claims to develop its products on the principles of aesthetics and ergonomics. "Products that have new designs to fit consumer tastes can have a higher added value, " Lin notes. "All of our products feature functionality and convenience, and we know very well that we have to develop products that are very different from those made by others. That's the only way we can stand firm in the international arena."

Half of Decorway's output uses its own designs, about 30% is made on an ODM basis, and the remaining 20% on an OEM basis.

The firm's joint-venture plants use stainless steel and low-carbon steel wire to make kitchen and bathroom products. The stainless-steel products can be chrome-plated or electro-polished, while those made of low-carbon steel wire are all chrome-plated. "We're cautious in our production processes, starting all the way from the selection of materials, " Lin says. "For instance, we used top-grade stainless steel to make our products to assure that they are free from rusting."



R&D Focus

Another firm that focuses on R&D is Chang Fu Precision Co., Ltd. Which claims that it has developed a special mechanism that assures the easy assembly of its products. Semi-automated machinery and numerically controlled (NC) machine tools such as lathes and pressing machines are used to make kitchen and bathroom accessories from stainless steel, iron wire, and iron plate.

"Never since our establishment in 1995 have we cut back on the use of high-grade materials to save production costs, " claims the company's president, Joe Huang. "The price of iron and steel has been rising for a long time, but we still stick to top-quality materials to ensure quality. I'm fully convinced that manufacturers in Taiwan should stick to the production of high-end kitchen and bathroom accessories to counter competition from emerging rivals in mainland China, who pay more attention to low cost than to quality."

Chang Fu's three veteran in-house designers can develop 20 to 30 new models of kitchen and bathroom accessories per year. Thirty percent of the company's output is accomplished to its own designs; the remaining 70% is done to customers' designs.

"Our products are developed in accordance with trends in world fashion, and with customer preferences, " Huang comments. "We have a high enough capacity to fill the production requirements of customers from all over the world, and we're also proud of our prompt deliveries."

In its exports the company focuses on the European market, but will begin efforts to develop the massive American market sometime this year. "In the past we concentrated on the European market, and we've laid a solid foundation there, " Huang notes. "With that experience, I believe that we can easily sell our products on the U.S. market if only we change our designs to meet American tastes."

Early this year the company began promoting a new and creative combination cabinet for use in both kitchen and bathroom. Huang says that it is also suitable for office use, since its structure and appearance can easily be changed to match the office environment. Made of stainless steel or coated iron sheet, it has the special rapid-assembly mechanism. New-model patents have been applied for in Taiwan, Germany, and the United Kingdom.



More Stainless Steel

Kingboss Co., Ltd. Operates a plant in Pali, Taipei County in northern Taiwan, where it turns out kitchen products and related accessories made of iron wire and stainless steel.

Most of its products are electroplated, while a small number feature baked-enamel coating. Victor Hung, the firm's vice president, reports that he has been boosting the use of stainless steel over the past year as part of an effort to "begin developing high-end lines through the elevation of our manufacturing skill." To do that, the company uses sophisticated production equipment.

"Although stainless steel costs more than iron wire and pipe, we're increasing our use of it, " Hung reports. "We've noticed that foreign customers, especially those from Western Europe and the Middle East, have a strong demand for high-end kitchen and bathroom products with little regard for prices.

The company used to concentrate on domestic sales through local vendors, but with its move toward high-end products it wants to develop overseas sales as well. The firm's own "Truth" brand goes on products for both domestic and export sales, but it welcomes OEM and ODM orders as well.

Exports have gone to Australia, Southeast Asia, and Latin America. The most popular export items today are a three-shelf corner rack, dress and towel rack, corner kit, Z-shelf spice rack, knife and carving board holder, paper towel and foil holder, and bowl and plate drawer.

"In making our kitchen and bathroom products, " Hung comments, "we pay a lot of attention to convenience of use. For example, most of our racks are pull-out, self-closing types that save users a lot of energy. The racks have a special design in accordance with world market trends."

Kingboss produces on an OEM and ODM basis. "Our orders from Spain, for example, are all on an ODM basis, " Hung reports. "We abide by our Spanish customer's request that we not ship the same products to others, so that his distribution rights can be fully protected. We'll follow the same rule if we get ODM orders from other customers."

Like other producers, Kingboss has had to contend with rising prices and short supplies of iron and steel materials; at the beginning of this year, however, the shortage seems to have alleviated. Hung believes that prices will remain at a steadier level this year as well.



A Reputation Well Built

Uei Shin Industrial Co., which with more than two decades of experience is one of Taiwan's most reputable makers of metal-wire products, boasts a number of skilled in-house designers. The company's main product lines at the present time are Teflon-coated and enameled barbecue equipment, metal-wire kitchen racks, and small kitchen utensils.

The company's plant in the central Taiwan city of Changhua uses sophisticated coating equipment to ensure high quality. Exports account for over 90% of total production.

"We began promoting exports some seven or eight years ago, " reports Uei Shin president Kuo Kuo-chin, "and we've found that our exports are better than our domestic sales. Our export orientation has pushed us to develop more sophisticated lines because our foreign customers, especially those from the U.S., Japan, and Europe, want high-end products."

The company's expertise is in the development of multifunction kitchen utensils. Its kitchen racks, for example, can be easily adjusted in height, and they can be developed as wall-mounted or floor types to meet customer needs.

Uei Shin is currently going all-out in the development of innovative kitchen racks featuring new designs, as well as knock-down barbecue equipment. Development of these new products will be completed in the first quarter of 2005. (Jan. 2005)