Taiwan Machine-tool Manufacturers Make Inroads Into Brazil

Taipei, June 14, 2006 (CENS)--Thanks to the efforts made by such large firms as She Hong Industrial Co., Yeong Chin Machinery Industries Co., and Fair Friend Ent. Co., Taiwan shipped US$14 million worth of CNC (computerized numerically controlled) machining centers to Brazil last year, trailing behind only Japan and Germany in the field.

Brazil has prosperous aerospace and automobile industries. In the past, consumers there, most of who are European descendants, preferred to procure machine tools from such industrialized European nations as Germany, Italy, Switzerland, and Spain due to cultural, custom and linguistic factors, which has led to a small market share for Taiwan-made machine tools, including lathes, milling machines, presses, and electric discharge machines (EDMs).

Despite the difficulty of entering the market, Taiwan-made machining centers held an 18.4% share of Brazil' s machinery sales last year, with an import value of US$76 million.

She Hong President Yeh Hsin-hua noted that Brazil' s machine-tool market has great potential for Taiwanese companies, as his company has experienced a growth of more than 20% in sales of machining centers to that market over the past three years. Yeh attributed the substantial growth in sales of machining centers to Brazil' s strong demand for machines used for processing aerospace and automobile parts.

Wang Cheng-ching, vice president of the Taiwan Association of Machinery Industry, noted that machining centers and lathes are the two hottest-selling machines made by the island' s manufacturers. Of these tools, lathes are mainly employed to produce parts by large-sized automobile makers, which traditionally have preferred to procure machines from European nations. On the other hand, machining centers are usually adopted by small-sized satellite factories. In this situation, domestic manufacturers are able to sell machining centers in Brazil more easily than lathes. In addition, Taiwan-made machining centers carry lower prices than those made in Japan and Germany.

The government-backed Taiwan External Trade Development Council (TAITRA) said that in the past, Taiwan' s machine-tool manufacturers were reluctant to develop the Brazilian market because of political turmoil and currency volatility.

Beginning last year, however, domestic machine-tool manufacturers have been more aggressive than before in Brazil because of its listing as one of the world' s four largest economically emerging markets, with the others being Russia, India, and mainland China.

For instance, last year TAITRA organized a group formed by such large-sized firms as Awea Mechantronic Corp., Yeong Chin Machinery Industries Co., and Equiptop Hitech Co. to take part in an international machine-tool show held there, and their inexpensive products drew a great amount of interest from show-goers. TAITRA believes Brazil is likely to become one of Taiwan' s major export outlets for machine tools in the foreseeable future.

According to statistics compiled by TAITRA, Brazil imported US$68.8 million worth of lathes last year, US$2.57 million of which came from Taiwan. For other kinds of machines, the Latin American nation imported US$107 million, US$38.01 million, and US$12 million worth of plastic injection molding machines, weaving machines and looms, respectively last year. However, Taiwan accounted for only US$7.33 million, US$570,000 and US$1.06 million of the sales, respectively. TAITRA believes that domestic manufacturers will be able to boost their sales Brazil, as demand there is increasing.