Is Taiwan a threat?

Jerry Lirette thinks so. In a speech at Structual Plastics 2000, the president of moldmaking components supplier D-M-E Co. listed several reasons why Asian moldmakers are a threat to their North American competitors.

Lirette notes that the playing field for moldmakers is not level. “Many Asian countries have the availability of low-wage designers, moldmakers and molders, 24 hours a day, six or seven days a week.” In addition, “Asian companies receive incentives for high-tech investments, low- or no-cost government loans, training costs offsets, and export assistance through trading companies.”

He also suggested that Taiwan in particular is planning for the long term, with a mandate that mechanical and computer skills be included in the public school curriculum from kindergarten through the grade 12.

A major worldwide survey of moldmakers undertaken last year reached similar conclusions. The CIMdata report, The Worldwide Moldmaking Environment and How to Compete, predicts flat or downward growth for the U.S. and European moldmaking markets, but strong growth for the Asia/Pacific region.

“A major factor is that capital is not a problem. The government or banks furnish it….,” the report states. “Hence, there are few constraints to the purchase and implementation of new equipment. The cost of labor is also lower than Western countries. If necessary, prices can be lowered without serious impact.”

The CIMdata report, written by Alan Christman and Jeann Naysmith, found that nearly 60 percent of respondents consider price and delivery to be the basis by which they compete with other moldmakers (see diagram, page 29). Consequently, about one-third of respondents cite improving delivery times as their highest issue to be addressed.

With moldmakers from Taiwan and other Asian countries being perceived as strong competitors in the key areas of cost and delivery, it seems they will indeed be a threat to North American moldmakers in the near term.