Manufacturers Weigh Benefits of Establishing Mainland Factories

 

By Daniel Foong

According to industry sources, a recently emerging trend is that bathroom accessories are becoming increasingly automatic instead of manual. Another growing tendency, at least in parts of the Western world, is that materials used to make these types of products are being chosen with more attention paid to how environmentally friendly they are.

Despite the global economic slowdown, Taiwan manufacturers of bathroom accessories report that in the first half of this year they have registered increases in exports. One manufacturer in the field is now considering making investments in either mainland China or Malaysia. An evaluation by the company on the advantages and disadvantages of investing in these two countries is currently under way.

Largely composed of ABS plastic materials and stainless steel, Taiwan-made bathroom accessories are quite evenly distributed to the world market. This situation is part of many suppliers' efforts to avoid the risk of putting all their eggs into one basket by marketing only to a few select countries or regions.

The International Hardware Show in Cologne and the National Hardware Show in Chicago are the world's two biggest hardware trade fairs that makers of bathroom accessories cannot afford to miss. Manufacturers in this field say that they learn of new market trends by participating in these major shows. They note that design ideas sometimes also come from foreign buyers.

Der Yi Co., Ltd., a manufacturer of bathroom accessories such as mirrors and towel bars, was granted U.S. patent rights in May of this year in recognition of its superior product quality, revealed W. H. Chang, president of the company. "We are making OEM products for major buyers from the U.S. and Europe. Our bathroom accessories are of high quality and we provide excellent service," stated Chang.

The president said his company has spared no effort in working to develop new products. "We release new products early each year, mainly in conjunction with the International Hardware Show in Cologne, in which our agents participate," said Chang, adding that the firm's agents also take part in the National Hardware Show in Chicago.

The R&D department of Der Yi Co. is composed of two specialists who work on coming up with new models based on suggestions provided by customers and market information collected at the Cologne and Chicago hardware shows. The president said the company is planning to exhibit its bathroom accessories itself at the two major international hardware fairs next year, instead of asking agents to do it.

In order to make its product prices more competitive in the world market, Der Yi Co. set up a factory in Dongguan, southern China not long ago, at which operations have already begun. Several varieties of bathroom accessories are being turned out at the China plant, destined for export worldwide.

"By establishing a factory in China, our production costs will decrease, thus helping to intensify our competitive edge," commented the president. "As a result, we expect to receive more orders in the future."

Affected by the slower economy in the U.S. and Europe, Der Yi Co. suffered a marginal decrease in exports in the first half of this year, according to the company president. The wall mirrors and towel bars offered by the company are largely exported to these two regions.

A manufacturer of towel bars and rings, Giant Home Bath Accessories Co., Ltd. ships 70 percent of its production of these bathroom accessories to the U.S. and 30 percent to Europe. However, the global economic slowdown has weakened demand coming from the U.S. and European importers.

"In the first half of this year our exports have contracted slightly," stated Jennifer Lin of the sales department. She said Giant Home's towel bars and rings are exported through trading companies, who help to display these products at major international hardware shows such as the one in Cologne and the National Hardware Show in Chicago.

Mainland China makers of bathroom accessories have been Giant Home's toughest competitors in the world market because these manufacturers are able to provide products with better prices due to the abundant supplies of workers, according to Lin.

Although aware that production in mainland China would make the company's products more price competitive, the owner of Giant Home has no intention of opening a factory there, at least for the time being, said Lin. "Making an investment in mainland China is not necessarily a good thing. Many Taiwan investors have encountered failures in mainland China," Lin quoted her boss as saying.

Giant Home's towel bars and rings are made of brass and are of medium and high quality, the sales representative said. The brass is sourced from a local importer.

Having been in operation for about 20 years, Fanda Enterprise Co., Ltd. has been enjoying growth in both the export and domestic sales of bathroom accessories. In the first six months of this year, the company registered a 20 to 30 percent increase in exports.

"The bathroom accessories business is not necessarily affected by economic downturns. These products have become sort of daily necessities," commented Jenny Juan, sales manager of Fanda Enterprise.

The bathroom accessories offered by the company include aerosol dispensers, fragrance cans, automatic soap dispensers, paper dispensers, automatic faucets, automatic urinal flushers and jumbo roll issue dispensers. They are composed of ABS plastic material and stainless steel.

Fanda Enterprise's bathroom accessories are exported to countries around the globe, including to Europe, the U.S., Latin America and the Middle East. "Our exports are quite equally distributed. We don't want to focus on just one country or region, so as to reduce the production risk," stated Juan.

The sales manager said shipments to mainland China, through Hong Kong importers, have been on the rise over the last several years. "We pin our hopes on the China market, which is growing gradually. A number of high-rise buildings and houses are being constructed there, which in turn require a lot of building materials - including bathroom accessories," said Juan.

Juan noted that her company is conducting feasibility studies on the profitability of investment in mainland China and Malaysia. "Our customers in Malaysia have been encouraging us to invest there," she revealed.

Juan said that while the land and labor costs in mainland China are lower than in other regions, the living standard in Malaysia is higher, and generally closer to that of Taiwan. Moreover, Malaysia enjoys overall political stability and the country is affluent. However, the availability of satellite factories providing related key parts and components is a priority consideration for offshore investment, she added.

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