Taiwan Hand Tool Sector Sees 19.2% QoQ Growth in 2010
2011/04/20 | By CENSIndustry to likely achieve record-high output value of NT$61 billion in 2011
Driven by the simmering American economy, the Taiwanese hand tool industry turned out NT$14.65 billion of products in the fourth quarter of 2010 for a 19.2% growth from that in 2009. But due to the appreciating New Taiwan dollar, the output value was 8.3% lower than that in the third quarter, according to the latest report published by the ITIS (Industry & Technology Intelligence Services) Project, Metal Industries Research & Development Centre (MIRDC) in Taiwan.
The ITIS report shows that hand tool exports totaled NT$13.7 billion in the quarter, up 19.2% yearly but down 8.4% quarterly, while imports markedly soared 50.6% year on year to NT$1.22 billion, slipping 6.9% from a quarter earlier.
The sector's production value in 2010 totaled NT$57.15 billion for a growth of 23.3% from 2009, with NT$54.33 billion in exports and NT$4.57 billion in imports, respectively up 28.5% and 62.6%, with the scale of the Taiwanese market expanding by 19.4% to NT$7.39 billion. With the International Monetary Fund and World Bank predicting global GDP to grow 4.4% and 3.3% in 2011 respectively, such figures are expected to rise this year.
The U.S. imported NT$14.23 billion, or 26.3% of Taiwan-made hand tools to lead as the biggest buyer in 2010, with Germany trailing at NT$3.76 billion or 6.9%. China and Japan ranked No.3 and No.4 with shares of 6.3% and 4.9%, respectively, or NT$3.47 billion and NT$2.67 billion.
Taiwan imported 48.1% of hand tools from Japan, 33% from China and 4.1% from Germany, all of which totaled NT$5.61 billion.
Bright Outlook
After posting encouraging results in 2010, Taiwan's hand tool sector is expected to see promising growth in the next few years, according to ITIS analysts.
Citing a report from Companiesandmarket.com, a global market survey institute, ITIS analysts say that global sales of tools and related accessories will continue to trend upward to an estimated US$19.4 billion by 2015 due to rising demand for DIY tools, power tools and high-efficiency, top-end tools.
Despite recently reported fiscal woes in the EU and still uncertain recovery in the U.S. compared to emerging nations, the western nations will continue to lead global hand tool markets, which bodes well for Taiwanese suppliers who rely on such markets as major export outlets yearly.
But market characteristics are changing, with DIY tools becoming more popular, say ITIS analysts, reasoning that the recent economic slowdown after the 2009 recession has driven consumers to be more budget-minded and do more home improvements without professional help, hence fueling demand for economically-priced, durable DIY tools. Unfortunately the trend may be counter-productive for Taiwan, as most local makers have withdrawn from the segment due to intensifying rivalry from emerging countries.
Positive news is that, with massive infrastructure development in emerging nations, the demand generated in such segments will help to sustain demand growth for hand tools, setting up opportunities for Taiwanese makers in the future.
Market Trends
With product development of hand tools dependent on various factors as technological progress, climate change, material price fluctuations and changing demographics, ITIS analysts say that several design trends will likely emerge to influence the industry in the coming years.
One example is the rising development of hand tools for seniors over the past few years, say ITIS analysts, as well as reiterated by DIY International's managing editor Rainer Strnad at a lecture titled “The Current Trends and Prospect of European DIY Retailer Market” at the Taiwan Hardware Show last year.
Seniors and retirees are the main buyers in Europe's DIY and garden industries for having both disposable cash and valuing leisure and quality of life, says Strnad while citing statistics compiled by the DIY International showing that 50-and-older Germans accounted for 51.6% of total housekeeping expenditures of 61.6 billion euro in 2009, compared to 46.5% in 2006.
Also miniaturization, electrification and mass reduction have been realized by improvements in motor technologies with smaller batteries to achieve easier, more effortless operation; while integrating LED (light emitting diode) and other optoelectronic components in auto repair tools for enhanced value and functionality is also a trend, ITIS analysts says.
ECFA
The ECFA (Economic Cooperation Framework Agreement) between Taiwan and China is set to realize tangible benefits for Taiwanese tool makers starting this year.
Duties on five kinds of Taiwan-made tools exported to China, namely pliers, wrenches, hammers, screwdrivers and hand tools in general, will be cut to zero by 2012, opening the door to China's huge domestic market wider to Taiwanese suppliers. The five categories made up 50.5% of industry exports to China in value in 2010.
Aiming to help Taiwan suppliers build presence in China, THTMA (Taiwan Hand Tool Manufacturers' Association) chairman Mark Lin is working with the All-China Federation of Industry & Commerce and China National Hardware Association to facilitate mutual communication and information exchange between insiders.
Amid optimistic prospects for 2011, Taiwan's hand tool industry will likely achieve record-high output value of NT$61 billion in the year, with exports and imports respectively to reach NT$58 billion and NT$4.8 billion, forecast ITIS analysts.
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Caption:
1. Taiwanese makers are developing electric-powered garden scissors for professional and DIY users.
2. Higher-end digital torque wrenches and diagnostic tools for auto repair developed by Taiwanese manufacturers
3. Rainer Strnad talks about “The Current Trends and Prospect of European DIY Retailer Market” at Taiwan Hardware Show 2010.
4. The new THTMA chairman Mark Lin (right) stresses building presence of Taiwanese hand tool manufacturers in China in the next few years.
Output of Taiwan's Hand Tool Industry | |||||||
| 2007 | 2008 | 2009 | Q4, 2010 | 2010 | ||
Value | Value | Value | Value | Y-on-Y Growth | Value | Y-on-Y Growth | |
Output | 59.04 | 59.45 | 46.34 | 14.65 | 19.2% | 57.15 | 23.3% |
Export | 51.95 | 55.89 | 42.96 | 13.7 | 19.2% | 54.33 | 28.5% |
Import | 3.88 | 4.29 | 2.81 | 1.22 | 62.5% | 4.57 | 62.6% |
Source: MIRDC