After more than half a century in the business, Taiwan's plumbing-goods manufacturers have become known for high product quality and are offering unique types of models that are proving extremely attractive to international buyers.

Industry insiders say that the development in Taiwan of copper die-casting-the core processing technology for plumbing manufacturers-began during the period of Japanese occupation and that the technology has matured with technical help from such semi-official institutions as the Metal Industries Research and Development Center (MIRDC). The manufacturers have learned well how to blend other metals with copper in the proper proportions to make pipes for different purposes-something that cannot come from using automated production lines alone

The imposition by most Western countries of strict requirements for products associated with water supply has made entry into the industry harder than before, and manufacturers that keep costs down by using inferior materials are prevented from selling their wares in major global markets. This indirectly reduces the opportunities for price-slashing competition.

Price competition continues to exist, however, especially for such common products as valves whose specifications have become standardized. There is still room for the expansion of market niches, however, for products such as faucets and showerheads that stress attractive appearance and special functions.

While copper remains the classic material for water pipes, other materials such as industrial ceramics and plastics are now being used as well. Some plumbing products also incorporate electronic devices these days, adding to their value.

Joining the Top Three

One company that is using unique functions to attract orders is Long Tai Copper Corp., which recently diversified into the production of disinfecting taps that use ozone to kill viruses, and aluminum shower panels that contain several showerheads for massage purposes.

"From the day I started business as a manufacturer of faucet molds 25 years ago," recalls Long Tai chairman Wu Yih-dar, "I was aware that faucet manufacturers had to introduce new products constantly to survive." Three years after setting up the company Wu shifted to the manufacturing of faucets and valves, and today his company is among Taiwan's top three makers of faucets.

In all, Long Tai's 10-person design team, using a budget equal to 3% of revenues (around US$10 million a year) has developed 70 models of faucets and 500 parts. It has won 15 patents, including those for the ozone generator (developed over a three-year period in cooperation with Cashido Corp., an environmental-technology firm) and the shower panel.

The palm-sized ozone generator is mated with a water-ozone blender and kicks into operation as soon as vacuum-caused pressure of at least five kilograms per square centimeter is produced by tap water running through the blender, which is attached to the mouth of the faucet. The unit is powered through a connection to a 90- to 250-volt electricity source, and shuts off automatically after 10 minutes to prevent an excess of gas that might pose a health hazard.

The government-backed Food Industry Research and Development Institute (FIRDI) has certified the new tap system, which has been awarded four patents and has two more pending. It is claimed to be able to kill 99.99% of all escherichia coli, staphylococcus aureus, proteus vulgaris, pseudomonas aeroginosa, and klebsiella pheumoniae viruses within 10 seconds. The product has already been awarded CE approval, and the company has applied for UL certification in Canada and the United States.

Long Tai and Cashido plan to ship 20,000 of the tap systems a month at first, building up ultimately to one million systems. The partners are already busy developing an improved version, in which the ozone generator is built directly into the tap system (it is currently connected by a 1.5-meter tube), thus making installation quicker and easier.

Long Tai is also developing a compact motor that will improve the effectiveness of the shower panel by pumping water forcefully out of the showerhead being used to give a real water-jet massage effect.

All of the company's faucets are for indoor use. About 20% of them are sold for commercial operations such as McDonald's stores, while the remainder go for household use. The commercial faucets require more complicated production techniques, Wu comments, because they usually have to withstand much higher water pressure than household faucets. The most important factor in marketing such commercial products, he adds, is efficient logistical support so that replacement parts can be delivered quickly.

Of Long Tai's household faucets, about 40% go to retail stores catering to DIY consumers, 15% are sold to construction companies, and another 15% are made for brand-name suppliers on an original equipment manufacturer (OEM) basis. More than 80% are shipped to North America, the world's biggest market for faucets, proving that the products meet strict CSA and AIPMO standards on toxicity, leakage, and safety. Thanks to these standards, Wu notes, "unqualified products are prevented from entering North America, and this keeps low-end suppliers from joining the competition there."

A big challenge facing faucet makers, Wu comments, is the need to introduce new models constantly and to meet the relevant regulations. Another challenge is for manufacturers to create their own brands. Long Tai began promoting its "Lucky Top" brand several years ago and is now using it in some Southeast Asian markets. Overall, the company depends on own-brand products for about 10% of its revenue.

The firm's faucet factories are equipped to handle almost every step in the production process, from the melting of copper ingots to the polishing of finished products. Automatic lathes are used for precision treatment-a big improvement over the traditional hand-operated machines. In this respect, Wu says, mainland Chinese suppliers are unable to compete. Completed products are examined in the company's own laboratory before going on to IAMPO and CSA laboratories in North America.

Since valves now have standardized models and specifications, they are afflicted by price-slashing competition. In response to this problem Long Tai moved its valve production base to Indonesia 12 years ago in pursuit of lower labor costs.

Using Non-Metal Materials

Jake Chu, export manager of Duratak Co., a trading company that focuses on faucets and also deals in showerheads, says that a growing trend in the faucet business is toward the use of non-metal materials such as precision ceramics and plastics. "For a long time," he notes, "faucets-especially good-quality ones-were made entirely of low-lead copper. Besides using different materials, the products have recently come to be plated in various colors such as oil brown and wood grain, which completely changes their stereotypical metal look."

The company supplies bathroom and kitchen faucets in more than 100 styles. All are sourced from Taiwanese manufacturers, who are noted for their ability to make products in small quantities and a large variety of styles.

The United States is Duratek's main market, where the products, all of which qualify under the UP code, are sold through professional stores. More and more Canadian buyers are interested in the products; and, Chu stresses, "So far as I know, Canadian consumers never buy cheap faucets."

The export manager believes that most cheap faucets entering the North American market are from mainland China, and that they can be identified by their "shining zinc-alloy case covering a solid copper pipe. Taiwan-made faucets are made of copper in one piece." Many mainland Chinese have obtained standard approval, he continues, and so have emerged as a threat to Taiwanese suppliers.

"To distance ourselves from them," he comments, "Taiwan's manufacturers must pay more attention to design." Buyers are attracted to faucets in vivid colors, he notes, and "mainland Chinese suppliers can hardly compete with Taiwanese suppliers when it comes to sophisticated surface treatment."

The company guarantees delivery of its products, all of which carry customer brand names, in 45 days.

NSF Approval

Hung Ruei-mu, chairman of Shyang Yih Hardware Factory, shifted the emphasis of his production from parts for hydraulic equipment, pneumatic equipment, and tap-water faucets to faucets for RO (reverse osmosis) drinking-water machines three years go as part of a plan to escape from a crowded market now dominated by mainland Chinese suppliers. The reason for choosing the specialized faucets, he explains, is that "Products associated with drinking water are naturally subject to much stricter standards than are products associated with tap water, requiring more complicated production techniques and making them pricier."

The company turns out a wide range of parts for drinking-water machines, including ball valves, pneumatic and hydraulic connectors, quick connectors, flanges, safety valves, water gauge valves, needle valves, water inlet T-joints, ball cocks, reverse osmosis parts, and faucets. These products currently account for 80% of the company's revenue, with hydraulic and pneumatic parts making up the rest.

Shyang Yih won NSF approval last year, meaning that the lead content of its products must be under 0.025%. The approval process is not cheap; it costs NT$300,000 (US$9,100 at US$1:NT$34.7) for testing, and applicants have to submit reports on the makeup of their work pieces and provide product samples for examination at the NSF's U.S. headquarters.

"When you have to meet NSF standards," Hung says, "you can cut down on your defect rate by improving quality. NSF certification also makes you more welcome to bid for government contracts."

Hung claims that his company offers Taiwan's widest range of faucets for drinking-water machines (that in fact its range covers 95% of all products available on the domestic market), and that it is among the island's top-three faucet suppliers in terms of quality.

Shyang Yih has developed several patented faucets over the past three years, among them a removable rubber water-control mechanism. Hung explains that most faucet sets come as a single unit and the whole set has to be replaced once the rubber structure wears out, while his new removable product allows the replacement of the water-control mechanism alone.

Hung claims that Taiwanese manufacturers have emerged as the world's best contract suppliers of RO parts, having learned the trade from American suppliers. "Although some suppliers are coming up in mainland China," he comments, "they are not a threat to us because they are still lacking in quality." Hung himself invested in a mainland factory to supply the domestic market there; that factory now turns out 10,000 drinking-water-machine faucets and 10,000 RO faucets a month.

King of Wastewater Piping

For Wang Lien-fa, chairman of Tung Li Enterprise Co., the way to keep profits up is to supply large pipes for kitchen and bathroom wastewater. The company has produced these pipes for several years now, after switching from doing electroplating jobs for 25 years. It produces S-shaped pipes, for examples, in diameters of 1.25 to 1.5 inches, compared with the 12.7 centimeters that, Wang says, most of the island's manufacturers concentrate on.

"In our industry," Wang notes, "pipe bending-especially of big pipes-is the most sophisticated process. Big diameters tend to make the bending fail. This is why inexperienced manufacturers prefer small pipes over big ones when they start up their businesses." Only two or three companies-including his own-are able to make big pipes, he says, while there are many makers of small pipes.

Completing a pipe like those made by Tung Li requires 13 to 15 processing steps, from softening to polishing. Copper is the main material used, although some factories use plastic. "Copper is used for high-end pipes," Wang says, "whereas plastic pipes are considered low-end products that are not durable."

The company guarantees a defect ratio of no more than 3%, which Wang says is the lowest in the industry in Taiwan.

To assure quality, Tung Li usually imports unrefined copper pipes in large quantities. Consistent quality in different batches of products is very difficult to maintain, he says, even when the material comes from the same supplier. That is why the company prefers "to import excessive amounts of quality material at one time, rather than take a chance of acquiring inferior materials by importing exact amounts with the aim of reducing inventory risk."

The company sells its pipes through DIY retailers, professional stores, and construction firms around Taiwan, and plans to develop exports this year.