Home>>Related Stories

Email this story     Print this story

At Taipei Plas, guarded reactions to China-US trade war

By Kent Miller | PLASTICS NEWS CHINA

On the floor at the recent Taipei Plas trade show, the mood regarding the US-China trade war was definitely mixed.

In the short term, the outlook is good, executives say. Last month, Fong Kee International Machinery Co., Ltd. sold three machines worth a total of $1.6 million to US customers, President Larry Wei said in an interview at his company's booth at Taipei's Nangang Exhibition Center.

Tool and mold makers see positives, too. "The trade war offers us a good opportunity to get into the US market," said Eric Li of mold maker CNN Plastic System Co., Ltd., in what was a typical response at the fair.

But some machinery executives with hard experience trying to sell to skeptical US buyers aren't quite as ebullient.

Machine makers interviewed on the floor of the show, which ran from Aug. 15-19, said they were well aware that when production engineers are pondering big-ticket purchases, price is not nearly as important as service, support and the assurance of a solid long-term relationship.

They said they know big Chinese machine-makers have done the arduous work of setting up local sales teams, support staff and technical centers, and that goodwill won't vanish overnight.

Tainan-based injection molding press maker Fu Chun Shin Machinery Manufacture Co., Ltd. and its crosstown rival Chuan Lih Fa Machinery Works Co., Ltd. are both big by Taiwanese standards.

Both companies have factories on the mainland and Taiwan. But for now, neither is putting a huge priority on the U.S. market.

"It's a chance for some Taiwanese plastics machine makers. But not us," said sales specialist Jeff Guo at Chuan Lih Fa, which sells some 500 machines a year.

Meanwhile, Fu Chun Shin is also focusing on Europe, where its distributor is busy building a continent-wide sales and support network.

Deputy Sales Manager Hank Wu says the tariff hammer will fall hardest on smaller Chinese manufacturers. Mainland competitors with a global reach have the flexibility to move assembly offshore, he points out. "Big companies like Haitian already have production on other countries," he said.

Even with the tariffs, some Taiwanese companies say they still won't be able to compete on price.

"Our machines are three times more expensive than Chinese machines," said Sandy Kuo, vice general manager at Taichung-based Jumbo Steel Machinery Co., Ltd., a 33-year-old maker of straw making machines.

Jumbo's machines are in the U.S. supply chain for brands like Starbucks and McDonald's. For straw makers with those kind of big corporate accounts, reliability always beats price, Kuo said.

There's also a generational split. Veterans who've weathered macroeconomic shocks of the past few decades - the Eurozone debt crises of recent years, the Great Recession of 2008, the 1997-98 Asian financial crises, even Black Monday in 1987 - are more guarded in their outlook.

Many of these veterans sit on the board of the Taiwan Association of Machinery Industry.

"[In] the long term, we think that [the trade dispute] might affect the willingness to invest," said Alan Wang, who chairs TAMI's Plastic & Rubber Machinery Committee.

Even outright competitors are split on their prognoses. "The trade war is good for us, because it makes their [China's] products so expensive," says Ray Wu, US office director for Taoyuan-based Hi-More Robot Co., Ltd.

But smallish robot-maker Tenso Machinery Ind. Co., Ltd., with annual sales of about $7 million, is worried about knock-on effects.

"We sell a lot to car companies in China. The trade war could hurt their production," said Marketing Manager Ivan Chen.

 

Read Next


NOW IN PRINT

Sample

This week's Plastics
News print issue

To download the full contents of this week's PN global issue, click HERE

GET MAIN NEWS

Latest news

on the trends and events impacting the Chinese plastics industry

SUBSCRIBE

CONNECT WITH US

erj tb ut rpn tb

Copyright © 2016 Crain Communications Inc. Use of editorial content without permission is strictly prohibited.