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.
Rising petroleum prices have increased the price of all material, driving up the price of wire rod more than 50% during 2004 and first half of 2005. There was a corresponding rise in fastener product prices up to the third quarter of 2005, when Taiwan fastener prices dropped briefly. But fastener prices in Taiwan have been rising since February.
In the international wire market, demand in the U.S. will continue to climb because of a growing economy, while European wire manufactures have sought to control production to reduce inventory, which has led to shortages of zinc coated wire. Demand in Japan is rising due to growing automotive, naval and industrial markets.
Taiwan Fastener Producers Upgrading Quality
Nearly 50% of Taiwan fastener companies (totally 1,459 companies) are located in southern Taiwan. However, nearly 80% of those companies have fewer than 20 employees and annual revenue of less than NT 40 million (US$1.27 million), showing that small fastener producers are prevalent in Taiwan.
Taiwan manufactured 1.5 million tons of fasteners in 2005, with more than 80% of that production exported. Taiwan”s fastener production more than tripled from 1990 to 2005, with the value growing more than 400%.
There are about 300 trading companies, and 169 of them are members of the Taiwan Fastener Trade Association.
Comparing the export volume between 2004 and 2005, Taiwan fastener shipments dropped about 10% to 1.258 million tons in 2005. But the average unit price of US$1.95 per kilogram represented a 16% jump in value, driving the overall value for 2005 up 4.5% to US$2.459 billion. This indicates that Taiwan fastener producers have upgraded their products to more value-added offerings. The U.S. received 54.6% of Taiwan fastener shipments, while Germany consumed 5.3% and Japan 4.6%. Canada was next with 3.9% of Taiwan fastener exports; the U.K. consumed 2.3%; Holland bought 2.1%; and Russia, Australia, Italy and China each received about 2%.
Innovation Key to Taiwan”s Fastener Future
Taiwan”s China Steel Corp. placed increased emphasis on R&D to increase value-added products while building new strategic alliances with downstream customers to upgrade the products and raise the value.
Upon the different manufacturing cost, technique, equipment, human resource and industrial needs, supply chain systems were set individually in the world. But suitable quality, punctual delivery and reasonable price are still the most important factors in any transaction. Accordingly, American and European fastener manufacturers use their domestic facilities to produce special parts and nonstandard fasteners, but purchase more standard fasteners in Asia.
Former Taiwan Industrial Fastener Institute chairman John Wu suggested that Taiwan fastener traders increase purchase orders and business for high added-value products to attract more international customers to buy Taiwan fasteners. A second strategy would be to partner with foreign companies to build factories that combine Taiwan”s production capacity with another fastener company”s demand for continuous improvement of product quality and upgrades, creating reasonable profits for both partners.
Other suggestions include more professional management training, upgrading technique and products, and strengthening strategic alliances.
Taiwan fastener producers are working to build the technical ability to produce value-added products; upgrade management skill and knowledge; adjust marketing mix and supply chain to maintain sufficient inventory while keeping costs down, enabling the majoring of Taiwan fastener companies to remain profitable.

2006 FastenerNews.com