Local stationery manufacturers sharpen their competitiveness

This article was written by Allen Hsu and published by the Taiwan Journal on April 13, 2007. It features Taiwan's stationery industry. Although the sector accounts for less than 1 percent of Taiwan's gross domestic product, it is considered the "little industry that could", generating annual sales of US$1 billion.

In the early stages of the post-Second World War period, Taiwan only had one pencil manufacturer and relied almost completely on imported stationery. Later, during the 1950s, local manufacturers of pencils, crayons and watercolors gradually emerged. In time, the volume of domestic stationery articles exceeded that of Japanese and U.S. imports. Many Taiwanese companies also established joint ventures with their foreign counterparts and brought in technology to produce a variety of stationery, including staples, ink and carbon paper.

Taiwan's stationery sector started exporting during the 1960s. However, since Taiwan's entry into the World Trade Organization in 2002, the sector has been facing severe competition. The onslaught of imports, copy machines and computers is forcing domestic stationery manufacturers to adopt a strategy of handling research and development locally while manufacturing overseas.

The Taiwan Association of Stationery Industries was established in 1956 to assist the nation's stationery sector by holding trade fairs, integrating resources among companies, and representing the industry in communication with the government. According to the association, 50 percent of stationery products made by Taiwanese companies are exported overseas, while 50 percent are sold in the domestic market. In order to cope with fierce competition from abroad, many Taiwanese companies are moving their labor-intensive operations offshore in order to lower costs and remain competitive.

Indeed, Taiwan's stationery sector is now squeezed between high-end products from Japan and low-priced ones from China and Southeast Asian countries. Many Taiwanese companies are now surviving by doing contract manufacturing for American European companies, while promoting their own branded stationery in local and Southeast Asian markets.

Developing one's own brand is important. Building public confidence is also vital, as awareness of environmental preservation has a great impact on the stationery sector. For example, these days, polyvinyl chloride material used in stationery items has been replaced by recyclable plastic. Pencils made from recycled newspapers or from unprocessed wood have also become more appealing because of their eco-friendly reputation.

Most importantly, to win the trust of customers means maintaining consistent quality. Although many stationery items can be automatically assembled by machines, they still need people to carefully examine and conduct the final tests. As local and international customers become more discerning, they demand more from stationery, so that manufacturers need to possess the design capabilities to meet the public's needs.

One example of this is a Taiwanese company that specializes in the manufacturing of double-sided tape. The company has gained the know-how to designing tape-producing machines. In recent years, it has been profiting from the boom in TV video-game consoles by manufacturing insulation tape used in the machines. In another winning move, the company managed to become the exclusive producer of stickers used in the Rubik's Cube puzzle toy. Apart from its headquarters in Taiwan, the company now has factories in Malaysia, Thailand, Hong Kong and Shanghai. It has even successfully broken into the world's largest market, the United States, by avoiding direct competition and instead doing contract manufacturing for large-scale shopping malls and stationery companies.

This article concludes by pointing out that as long as manufacturers keep designing high-quality products, any business, old-fashioned or cutting-edge, can flourish. The same certainly applies to Taiwan's stationery industry.