I am beginning a new chapter in my writing with Woodworking Network. I have been sent to Taiwan to report on current trends related to Taiwanese woodworking equipment, 80% of which is exported. As interesting as that assignment may sound, the truth is that the Taiwanese government, which is rightfully supportive of Taiwanese industry, funded a program to bring international woodworking press to Taiwan to participate in a tour of the woodworking machinery industry in anticipation of a large national trade show to be held in July of this year. My editor offered me the opportunity to do this trip. I am here along with a representative from Germany and one from Japan.

Taiwan is the fourth largest exporter of woodworking machinery in the world today behind the Germans, the Italians, and the Chinese. Being number four is not without its issues.

Most factories in Taiwan that produce woodworking machinery are small to medium operations. Some are as small as five employees. There are approximately 300 of them and they are, for the most part, clustered together in the Taichung area. Many are family businesses that are second and third generation owned. Located in west-central Taiwan, according to Wikipedia, Taichung has about 2.7 million people. As one would expect from a city of that size on an island the size of Taiwan, there is not much land that is not in use. Couple that with the reality that 60% of the island is mountainous and unusable, homes, industrial buildings, and shops spring up like weeds everywhere there is open ground. Stuffed in between them are rice paddies, gardens, and agricultural fields.

As the factories are small, they often don’t produce a large variety of machinery. Floor space is often quite limited. They each have a niche market that they cater to and leave other equipment to others who have the passion for that machine. For example, the very first factory we visited, Kuang Yung Machinery Co., Ltd., specializes in gang rip saws and cutoff saws. That approach to market is very common.

If you need a drill press, you would need to go down the road a bit to a manufacturer that builds them. If you look hard enough, you may well find several in the Taichung area.

Speaking of going down the road, a great deal of the work in building a machine in Taiwan is done by suppliers who are, themselves, specialists in such niche markets as lathe work, surface grinding, milling, or metal working. One factory owner told us that he can get everything he needs in terms of machining and engineering within a radius of 50 miles from his plant. Finished parts arrive at the factory door and the factory assembles the components and prepares the machinery for shipping. Since major machining processes are done elsewhere by experts in that process, quality is high, innovation is the watchword of those who are number 4, and patents and awards for excellence are to be seen on factory office walls. Parts from huge castings to small fasteners fill the parts room shelves and floors of factories we have visited.

A small to medium sized factory may only have ten to twenty-five employees. No room for huge and expensive machine shops. That work is farmed out to improve quality and keep costs down. Land is at a premium. The bigger the factory, the bigger the real estate costs.

Avis used to use the slogan, “We’re number two. We try harder.” In Taiwan, bring number four means you try harder still. Markets where one can compete with the Germans and Italians are very far away. A lean and mean approach is a good one. The Americas are far enough that shipping issues are more equal. And who would want to go to Europe anyway? It’s the back yard of the Germans and Italians.

China, Japan, Korea, and Russia are closer but don’t forget that China is number 3. Things have changed in the Chinese labor market over the past 10 years giving the Taiwanese, they say, an opportunity. North America, South America, and Australia are far away making shipping and customer service difficult. But still, the Taiwanese say that they can compete.

Niches are where the Taiwanese excel. Flexibility and customization are their watch words.

Their newest and most interesting strategy is to band together to create a systems approach to selling. They’ve created a concept of teamwork resulting in six systems that they hope will both sell equipment and compete in the world market by providing a package that will out produce or at the very least perform on the same level with number 1 & 2’s offerings.

Systems 1 – 4 have been fleshed out. More are still in planning. In the works since 2012 are

• A flooring system to machine wooden flooring and

• A finger jointing system to use optimized material to create high quality dimensional shapes.

In 2014 they started work on

• A plate furniture production line and

• A wood board jointing line to create high quality solid wood panels.

Beyond these four, they are looking to the future by combining forces even further to create additional systems. As you can see, it takes little more to go from a finger jointing system to the wood board joining system. They go hand in hand. One only needs to explore the aisles of Home Depot or Ikea to see finger jointed, solid wood panels.

We were able to see several of these systems in operation either live or on video. Factories that make the components of each system have banded together through their national woodworking machinery association to work to make these systems as lean, mean, and efficient as can be. Having viewed the fruits of their labors, I can say that they are exciting to watch and make one wonder what the future holds for these manufacturers. They are determined as their government supporters to make things work.

In my next report, I will flesh out the four systems that they have developed and try to show you how the Taiwanese think they will work.