12th AGM of THTM Was Held on Oct. 7, 2011

With hundreds of business owners and corporate managers taking part, the 12th annual general meeting (AGM) of the Taiwan Hand Tool Manufacturers’ Association (THTMA) was held on Oct. 7, 2011, in central Taiwan’s Taichung City. Despite the sagging global economy, the meeting was upbeat about the industry’s future prospects. In addition to hand-tool industry insiders, the AGM also drew several dignitaries from other organizations, including the Industrial Development Bureau, Taiwan External Trade Development Council, and the Taiwan Steel and Iron Industries Association. The enthusiastic participation in the meeting was attributable partly to chairman Mark Lin’s work, since his inauguration last year, on structural changes designed to increase membership and boost solidarity among Taiwan’s hand tool manufacturers. His efforts are paying off; 40 more companies have joined the association over the past year, and the original members are participating in association activities more actively. In his opening address at the meeting, Lin noted that the addition of the 40 newcomers has brought the THTMA’s total membership to 438 and that the association is striving to enhance its organizational efficiency and performance by implementing standard operating procedures (SOPs) and a key performance indicator (KPI) system that is increasingly recognized by local hand tool companies. Overseas Market Expansion Lin also talked about the THTMA’s overseas market development work, noting that the association has cooperated with the Bureau of Foreign Trade (BOFT) in exploring foreign markets in 14 different countries including China, Japan, South Korea, India, Vietnam, Indonesia, Brazil, Egypt, Russia, and the Middle East. Buoyed by sales in these new markets, the industry posted an overall export growth from January to July this year, Lin reported, adding that the THTMA is continuing to coordinate with other BOFT projects designed to tap emerging markets. China is given special priority among the THTMA’s target markets. Lin noted that the association’s efforts to enhance the industry’s business deployment there are proceeding apace, with frequent meetings between THTMA and three major Chinese hardware and hand tool associations: the China National Hardware Association, All-China Federation of Industry & Commerce (Hardware and Electromechanical Chamber), and China National Hardware Electric and Chemical Products Commercial Association. For example, a business delegation organized by the China National Hardware Association together with the Chamber of Hardware & Electronic of Guangdong attended a meeting held by THTMA in Taichung and visited local factories last October to forge a closer long-term partnership with the industry. A month later, the All-China Federation of Industry & Commerce made factory tours on the island. The trend of increasing business exchanges across the Taiwan Straits also prompted the Shanghai Federation of Industry and Commerce to organize a delegation to visit THTMA and several Taiwanese hand tool suppliers in June 2011. Lin stressed that the sharing of information and the holding periodic meetings will pave the path of least resistance for Taiwanese companies in China, and the Economic Cooperation Framework Agreement (ECFA) that took effect at the beginning of 2011 has also opened more widely the door to the Chinese market. According to statistics compiled by THTMA, Taiwan’s exports to China of the five hand tool categories subject to priority tariff cuts amounted to US$12.988 million in the first half of this year, a significant increase from the US$9.188 million recorded a year earlier when the preferential economic agreement was still in its formative stage. Exports to China of pliers, vices, and related tools amounted to US$3.344 million in the six-month period; shipments of wrenches and adjustable wrenches totaled US$2.462 million, double the US$1.182 million of the first half of last year; and sales of hammers reached US$556,209, screwdrivers US$3.838 million, and other drilling, threading, and tapping tools to US$2.786 million. Cooperation With Japan Lin also heralded the Taiwanese hand tool industry’s growing cooperation with Japanese partners: “As the Japanese hand tool industry is looking to reinforce its supply chain through the building a reliable, efficient manufacturing system in Asian countries, especially after the massive earthquake in March 2011, THTMA stands a chance of making more business exchanges with Japanese companies.” THTMA and the Metal Industries Research & Development Centre (MIRDC) jointly organized a business group consisting of six top-end Taiwanese manufacturers to visit R&D bodies and hand tool manufacturers in Miki City in central Japan, one of the country’s most important supply bases for hand tools. The visit was a huge success. The delegation was officially greeted by the major of Miki, the deputy governor of Hyoko Prefecture, and local councilors, along with business owners and managers from more than 30 local companies, many of whom expressed a strong interest in including Taiwan as their major outsourcing base after learning about the quality of Taiwan-made hand tools from presentations given by the delegation. In an interview with CENS a few months ago, Lin revealed that his association plans to organize a second mission in late 2011 to visit Niigata Prefecture, another hand-tool manufacturing base in central Japan. Sooner or later, Lin said, the industry will gain growth momentum from the increasingly close Taiwan-Japan supply chain. Better to Compete Globally While striving to expand the industry’s global deployment, THTMA has also helped local manufacturers strengthen their global competitive advantage through a variety of means. One strategy is to help Taiwanese hand tool manufacturers become AEO (Authorized Economic Operator)-certificated. To coordinate with the WTO’s promotion of the Framework of Standards to Secure and Facilitate Global Trade (SAFE), 46 countries have begun carrying out AEO auditing and application, inaugurating a global trend of trade security and facilitation. THTMA is following this trend by collecting related information and urging its members to take part in educational seminars held by BOFT officials this year. THTMA also moved to help reinforce the industry’s global competitiveness by holding a seminar early this year to provide information on newest environmental protection regulations, including EU’s REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) program. R&D Momentum Driven by China Steel Y.S Chen, assistant vice president of the China Steel Corp., the largest steelmaker in Taiwan, reported at the THTMA meeting that several R&D projects being jointly conducted by his company and the association for the development and improvement of steel materials are expected to further boost the industry’s position in the global supply chain. Chen said that hand tool manufacturing is one of the most globally competitive of China Steel’s downstream industries, and that the company has spared no effort to help local companies develop better steel materials, such as S2 and low-alloy steel, and improve manufacturing methodologies to enhance the added value of their products. Chen went on to say that his company’s focus on hand tools would be reflected in four seminars in November, at which R&D engineers from China Steel would present lectures related to the quality and characteristics of steel materials for hand tool manufacturing, improved heat treatment technologies, metallurgical engineering, and market trends of steel and hand tools. With more than 130 companies attending, Chen said, the seminars would hopefully speed up industry upgrading and technology exchanges between China Steel and the industry. "Taiwan’s hand tool industry is very likely to see a slowdown of growth in the fourth quarter of 2011,” Chen stated, “mainly because of the global economic recession, although it posted a 15% output growth in the past three quarters. China Steel will pay more attention to the joint development of steel materials and heat treatment technologies in the short term, so as to do all it can to help keep the industry afloat.” There is additional good news for the industry, Chen said, because although troubled by the depreciation of the New Taiwan dollar and the rising cost of iron ore and fuel coal, China Steel will try to keep domestic steel prices stable to secure the industry’s profitability. In addition, he noted, his company will hold a meeting with THTMA every three months to make sure that real-world market information is immediately shared and that manufacturers’ needs are properly met, as well as to help push for the establishment of Taiwan’s first hand tool museum as called for by the THTMA’s chairman. Preparing for Changes and Recession THTMA also arranged for Dr. Yukin Kure, a representative on Tunghai University’s Committee of International Education and Programs in Japan, to present a speech at the general meeting on ways the industry can prepare for upcoming changes and recession in the global market. Kure cited changes in Japan’s industrial development from the 1960s to the 21st century: “The country prospered on heavy industries such as shipbuilding, steelmaking, and chemicals in the 1960s, and carried out its first industrial upgrading to high-tech electronics and biotechnology in the1980s following the 1973 oil crisis. In the 21st century Japan’s industrial development has shifted to telecommunications, ecological and environmental engineering, and nanometer technology. Each transition, aimed at securing the country’s core competitiveness in the world, has proven effective in adapting industrial development to global market changes.” Kure urged Taiwanese hand tool manufacturers to carry out value-chain analysis and rebuild their respective core competencies from the ground up, and pay more attention to the real-world needs of end-users at every stage of the R&D process. “Japanese enterprises,” he explained, “have noticed that without feedback from end users, conventional R&D processes, from product development to manufacturing and marketing, will be futile in the increasingly demanding market. Manufacturers should develop new products based on value-network analysis to make sure that value can be generated for everyone, from suppliers and themselves to distributors and end users.” Kure also pointed out that the concept of the so-called 3-dimensional competitiveness analysis is increasingly prevalent among Japanese enterprises and that it is also applicable to the decision-making processes of Taiwanese companies. This analysis helps a company to review its competitiveness based on three dimensions: its manufacturing and R&D foundation, its operating procedures and organizational standards, and its sense of commitment and passion for its business. "A deep sense of commitment and passion is especially vital to a company’s success,” Kure stressed. “Many Japanese small and medium-sized companies have quickly resumed production and recovered business growth dampened by the March 11 earthquake, thanks mainly to a deep sense of commitment and passion. Taiwanese manufacturers can cope with abrupt changes and disasters as well as the Japanese can, so long as they constantly conduct 3-dimensional analysts and cultivate a deeper sense of commitment and passion for their business.” Source: cens.com