PERSPECTIVE: Taiwan Fastener Firms Eye Aerospace Market

John Wolz

Editor”s Note: The following column is presented by Taiwan-based Fastener World magazine as part of a news column exchange with FIN.
The five fastener manufacturers that comprise Taiwan”s Alliance of Aerospace Fastener Research have been accredited as AS9100 certified manufacturers. These manufacturers are San Shing Fastech Corp.; Chun Yu Works & Co. Ltd.; Anchor Fasteners; Jau Yuou; and Ying Ming. This achievement symbolizes a new milestone for the advancement of the fastener industry in Taiwan.
Achieving AS9100 accreditation demonstrates a commitment to conform quality management to an international aeronautical standard. Taiwan”s Civil Aeronautics Administration (CAA) is currently working to obtain “Product Certificate Label” in order for the Alliance to be fully authorized to develop aerospace fasteners. Once sufficient testing is conducted, Taiwan fastener manufacturers will gain “market exclusivity” in the region, securing the island”s influential position in the market.
About 85% of fastener products manufactured in Taiwan are exported worldwide. Taiwan fasteners enjoy a strong reputation for quality relative to low-cost Asian producers. But regional competition has led to a quick exodus of production lines from Taiwan. To generate new business opportunities, the Alliance began working with the Industrial Technology Research Institute to improve production processes and quality in order to achieve the AS9100 standard. Because of this, the main items for the automotive and aerospace industries.
If the Bilateral Airworthiness Agreement (BAA) were signed by the U.S. and Taiwan, the Civil Aeronautics Administration (CAA) would be able to administer the accreditation of the manufacturers in Taiwan, while the inspection work could be conducted by the ITRI. Once AS certified, Taiwan manufacturers would instantly be approved vendors, providing room to grow as long as quality and techniques remain competitive.
Taiwan is the largest exporter of fastener products to the U.S., accounting for 41% of the U.S.”s total import volume. However, the average unit price for Taiwan fasteners is only US$2.03/kg. By comparison, fasteners from Switzerland achieve an average unit price of US$7.85/kg, UK fastener producers get an average of US$17.67/kg, and France rakes in the highest average unit price of all imports US $22.28/kg.
In light of low-labor competition from neighboring countries, Taiwan fastener makers are trying to capitalize on their expertise accumulated over years of working in the industry, as well as manufacturing techniques, managerial skills and the ability of integrating resources, in order to regain market share. Taiwan fastener manufactures play a significant role in the global market, given the fact that they are a top choice for buyers of high-tech fasteners worldwide. Future market competition in the fastener industry will not be between individual enterprises as B2B rivalry, but among business sectors. Therefore manufacturers should lobby the Civil Aeronautics Administration to demand that standard fasteners be included in their BASA negotiations with the U.S. Since the acquisition of aerospace fasteners is characterized by small quantities and great varieties, buyers prefer collective purchasing. For this reason, the strength residing in each individual manufacturer should be integrated and upgraded for improved opportunities to win order bids for aerospace fasteners.
As indicated by Taiwan Industrial Fastener Association Chairman Sun Teh-bin, the aerospace fastener market is currently dominated by a few foreign manufacturers. Taiwan manufacturers realize the challenge of breaking into the aerospace market lies not in a need for greater technology, but of laws and institution. Through the functionality of the alliance, the expertise of individual manufacturers in R&D and production are being integrated – San Shing with a specialty in nuts, Chun Yu in large screws, Anchor Fasteners in blind nuts, Jau Yuou and Ying Ming in small screws and high strength bolts, respectively. With the collective efforts contributed by each member, the Alliance is undertaking a consolidation of resources in the fastener industry to boost competitiveness in the market of aerospace fasteners. \ �2006 FastenerNews.com