Taiwan's Display Racks Making Their Own Niches Around Globe

Thanks to impressive improvements in their design capabilities, Taiwan's display-rack makers are making steady headway in markets around the globe. The local industry has also been upgrading its manufacturing skills and incorporating high-grade materials, such as stainless steel and satin chrome-electroplated metal, to turn out products that are turning heads and winning orders in high-end markets.

While producers at home are raising quality to compete abroad, makers focusing on lower-end market segments are aggressively cutting manufacturing costs. Many have relocated to mainland China, where labor and land are cheap.

On both sides of the Taiwan Strait, however, the name of the game has been expansion into new markets. Producers are exploring beyond the old mainstay markets of the United States, Europe, and Japan, and in recent years they have even stimulated a bonanza of demand in their home markets of Taiwan and mainland China.



Racking Up Business


Shun Yang International Industrial Co., Ltd. Established in 1997, is a specialist manufacturer of display racks, shelves, and parts and accessories. Based in Taiwan, the company runs production lines on both sides of the Taiwan Strait, turning out racks and shelves made mainly of steel and finished with various powder coatings.

"We sell mainly to retail outlets; everything from boutiques to supermarkets, " says Rick Tung, president of the company. "Different stores need different kinds of display rack with different specifications. Some prefer fancy racks and some want plain ones. Whatever the requirement, we can make it."

Tung says that when his company gets a special order, be it for an attractive rack of delicate design for a jeweler or a heavy-duty display for a warehouse, his company can quickly develop molds and make punctual delivery. "Our efficiency comes from our streamlined operations and experienced workers, " he says proudly.

In addition to its manufacturing flexibility and superb craftsmanship, Shun Yang puts a lot of energy into making some of the industry's most reliable and safe racks. "We pay a lot of attention to the structural safety of our products, because safety is most important in display racks, " Tung states. Most of the company's light-duty display racks have a load capacity of 75 kg, heavy-duty models hold up to 150 kg, and extra-heavy-duty display racks, used mostly in the industrial sector, have a 250 kg capacity.

Shun Yang has three plants, one in Changhua, central Taiwan; and the other two in the mainland, with one in Xiamen, Fujian Province, and the other in Shanghai. The three plants employ approximately 1, 000 workers. "Mass-produced items are turned out in the mainland and small-volume specialty orders are filled in Taiwan, " Tung says. To take care of his company's cross-strait operations, Tung frequently flies between the two sides.

Faced with rising steel and iron prices, Shun Yang has been trying to cut costs through plant automation and by more tightly integrating its manufacturing process, including iron-cutting, electroplating, assembly, and packaging.

Currently the company exports about 70% of its output, with the remainder going to domestic markets in Taiwan and mainland China. Its major export outlet has been the United States, accounting for 70% to 80% of the company's exports, and Europe absorbs the remaining 20% to 30%. Standard products with common specifications dominate its range of offerings, but original equipment/design manufacturer (OEM/ODM) orders are also welcomed.



Quality First
Omni-power Co., Ltd. Established in 1986, specializes in the manufacture of satin-chrome and brushed-chrome finished display racks, store fixtures, shop fittings, commercial signboard holders, hangers, and mannequins.

"The market for display racks has been growing steadily among both household and commercial users, " says Connie Chen, senior secretary at the company. "Most of the products we sell today are the same as those we sold a decade ago, in terms of quality and design. But we constantly turn out new patterns to meet special customer needs."

Another trademark of Omni-Power's display products is their high quality surface coating. "We mainly use metal in our products, and this needs to be carefully surface treated. With nearly two decades of experience in the business, we can apply state-of-the-art surface treatment to our products. This is one of the reasons our products are so popular, " Chen says.

Today Omni-Power turns out half of its products in house, and sources the other half from manufacturers in both Taiwan and mainland China. "Although Omni-Power is a professional manufacturer of display racks, we don't need to make every item our customers require. Rather, we can help our buyers find the products they need from other suppliers, " Chen explains. Including outsourced products, Omni-Power is able to offer nearly 3, 000 types of product and accessory.

"We produce or purchase our products in Taiwan as long as they are still competitive in the world market. But if they aren't, we turn to suppliers in the mainland, " Chen says. "Our plant in Taiwan focuses mainly on high-end and special-order products, taking advantage of our highly skilled workers and advanced know-how."

The United States is Omni-Power's major market, taking 80% of the company's export total. The remaining 20% goes to Europe, Central and South America, Japan, and the Philippines.

To better service its clients in the U.S., Omni-Power established a warehouse in California about five years ago. The warehouse has given a big shot to the company's sales there. The continuing economic recovery in the U.S. has also encouraged U.S. buyers to expand operations, which in turn is boosting demand for commercial-use display racks.

Over the past several years, Omni-Power enjoyed average annual growth of around 10%. Today the company ships from Taiwan and the mainland a total of some 50 to 60 40-foot containers per month, valued at US$1.2-1.5 million. To meet an anticipated growth in demand, the company plans to recruit more workers for its warehouse in California and intends to set up more such kind of warehouses in the east coast of the U.S. and mainland China as well.



Household Display Racks
Founded in 1985, Skilltek Industries Inc. is a professional manufacturer of metallic products, including display racks, supermarket shelves, shopping carts, depository cages, storage shelves, and supermarket equipment.

The ISO9001-certified company has had its products approved by the U.S.-based National Sanitary Foundation (NSF), which means they are suitable for use in hospitals, restaurants, and semiconductor foundries. This approval has opened doors for the company in Europe and Japan in addition to the U.S.

The company claims that it currently has a 50% share of Japan's household display-rack market. "We develop innovative display racks exclusively for Japanese customers. That's why we have the lion's share of the Japanese market, " explains Mark Chen, the company's managing director. To meet the demands of its critical Japanese customers, Skilltek uses salt-spraying testing equipment to ensure that its products stand up to corrosion. Currently the company ships 100 40-foot containers to Japan monthly.

To lower manufacturing costs, Skilltek moved its production facility to Shanghai about 13 years ago. Today it has an integrated production plant there with a workforce of more than 1, 000. The plant can handle high volume orders with the shortest possible lead-time. Chen says the company's workers have extensive experience in wirework, coating, pressing, tubing, welding, machining, automatic chrome plating, zinc plating, powder coating, and assembly.

To streamline its manufacturing processes, Skilltek has equipped its plants with the latest integrated automatic equipment, such as four-slide/various-slide automatic wire-forming machines, wire straighteners, single and multiple access welders, specialty bending equipment, powder coating line, and an automatic chrome/zinc electroplating line.

"We have to constantly design new display racks to meet the requirements of our customers from different markets around the world, " Chen says. "Our R&D department has about 20 designers who help us develop new products. Most of them have over a decade of experience in this field."

Through its product innovation and top-notch quality, Skilltek has developed a solid customer base. The company now focuses on the Japan and the U.S. markets, but it is increasingly turning its sights to other markets to expand sales.