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10/22/2014 | 3 MINUTE READ

Taiwan Plastics Machinery Sector Balances Cost/Technology

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Locked geographically between China and Japan, Taiwan’s plastics machinery sector also finds itself sandwiched between the higher-tech higher-cost machines of nation’s like Japan and the lower-tech lower-cost technology of China.

Despite that business and geographical predicament, the industry is thriving. Taiwan’s 400-plus plastics and rubber machinery companies generated $1.2 billion in sales in 2013, with the sector ranked fifth globally behind only Germany, Japan, Italy, and China, according to TAMI, the country’s machinery association (for perspective, Germany’s plastics and rubber machinery makers hauled in $8.2 billion in 2013).


In the opening ceremony for last month’s Taipei Plas, Shih-Chao Cho, Taiwan’s vice minister of economic affairs, lauded the sector, calling manufacturing a “bedrock” of the Taiwanese economy. In more recent years, the island nation sought greater recognition for its tech sector, aided by government backing. To wit: one Metro stop down from the Nangang Exhibition Center that hosts Taipei Plas is Taiwan’s Nangang Software Park, the home of technology giants like IBM, Sony, Yahoo, Microsoft, and Hewlett-Packard.


That same government hasn’t forgotten the manufacturing revolution that converted Taiwan from an agricultural economy in the not-too-distant past, however. That acknowledgement came in no small part from the presence of the economic minister, as well as the vice president of Taiwan, who attended the previous Taipei Plas in 2012, when he was the country’s premier.


Between a Low-Cost Rock and Technology Hard Place
“Taiwan is caught between technology advances of the west and the low-cost challenge of China,” Vice Minister Cho said in his address. “Most Taiwanese companies are small-to-medium enterprises, which can be a challenge in some ways, but it also means they’re more flexible.”


On the show floor, Taiwanese machine exhibitors displayed higher technology machines, but with an emphasis on economical versions of every day processes versus the money-is-no-object conceptual machines sometimes occupying Western company’s booths at shows like K.


So in Taipei, show visitors saw a lot of two-component machines for multimaterial headlamps and high-speed hybrids for inmold-labeled packaging. Not new to the world, or the region for that matter, but perhaps new to many local processors.


Harrison Wei of injection molding machine manufacturer Jon Wai laid out an example of how a company like his can step up with a more advanced machine than might be found out of China (or currently being used in Taiwan), but one that does not break the customer’s bank. “To face the competition from China,” Wei said, “we need more value added.”


To that end, the company showed three machines at the show, including high-speed units for IML and closures, the latter being a 16-cavity closure system running a 3.5-second cycle. Plenty of production, but nowhere near the output a molder might generate from the 96-cavities-and-up closure systems that rain down caps every couple seconds at other shows.  


Asked about the technology/output disparity, Wei relayed a story in which a customer had initially considered a competitive high-technology machine from a well-known brand, but upon realizing the total cost would be two-and-a-half-times higher and cover one machine and one mold, versus one machine and three molds, the client opted for Jon Wai.


“It was for an ice cream application,” Wei recalls, “they only needed for five months out of the year.”


Film Extruders Step Up
Taiwanese extrusion equipment manufacturer Avita Machinery Co. Ltd. is also working to thread the cost/quality needled. “Our position is in middle,” Avita’s Allen Tsai explained at Taipei Plas. “We don’t want to go too low—our machines can’t compete in low price—and I don’t want to leave our quality to meet their price. We want to go up in quality not price.”


Tsai said that in many instances, roughly comparable equipment from China can be 20% lower in price, forcing company’s like his to offer other enticements. At the show, Avita ran an ABA-style coextrusion line (pictured below), creating three layers, including a thicker inner layer for lower cost materials, from two extruders by splitting the melt stream in the die. Coextrusion is increasingly replacing monolayer output in Asia, according to Tsai, thanks to greater efficiencies, with a 20-µm stretch film now capable of being thinned out to 12 µm.  


“This extruder represents a trend in blown film,” Tsai said. “Our customers want lower production costs.” Acknowledging higher technology, however, Avita equipped the line at the show with automatic gauge measurement and gravimetric blending. At shows in the west, systems ranging up to 11 layers, or much, much higher if you consider so-called micro-layer films. Three layers might seem more quaint than novel, but again, consider the market.


“We believe multilayer film will grow by double digits,” Tsai said, acknowledging the higher technology niche his company, and country, are trying to occupy.