Editorial >>Editorial
2023年，您的起手式在何處？

Where isYour Starting Point in
2023 is a year when fastener, hand tool, and hardware parts manufacturers are going full steam ahead. International trade shows areblooming all over the world, and there are reports of returning exhibitors. Fastener World even observed reappearance of Indian, Taiwaneseand Chinese exhibitors at the European and American trade shows since last year, which denotes fierce competition among them. Thisphenomena shows that the world is glad to see full reopening of the European and American markets, and is optimistic about the hugebusiness opportunities after the reopening. In addition, as China faces unprecedented political changes and a huge economic bottleneckin 2022, many buyers in Europe and the U.S. will not only strengthen their own production capabilities, but also prefer to purchase from
Asia, which has competitive prices and stable supply capabilities. This also brings business growth opportunities for Taiwan and even Asian
suppliers in 2023.
In light of this, this editorial will be divided into three topics: fastening tools, parts, and screws, and will guide readers tounderstand: (1) the export market size of Taiwan’s fastening tools; (2) the demand scale of global fastening tools; (3) growth
opportunities of the parts and fastening tools industry; and (4) the current situation and outlook of the fastening tools industry. In
this way, readers from all over the world will be able to understand the current situation in Taiwan and the global trend.

Hardware & Fastener Components - no.57/2023

The Fastening Tools Industry in Taiwan’s and Global Perspective

110

The Customs codes for fastening tools in Taiwan include “820411 - Non-adjustable manual spanners & wrenches” (Table 1), “820412 Adjustable manual spanners & wrenches” (Table 2), “820420 – Socket wrenches” (Table 3), “820540 - Screwdrivers” (Table 4), and “820790- Bits and tapping tools” (Table 5). The total export value of Taiwan fastening tools to the world for these five customs codes increased by
4.5% from US$1.03 billion in 2021 to US$1.076 billion in 2022. Among them, except for Taiwan’s “820790- Bits and tapping tools” (Table 5),
which showed a slight decrease of 5% in the global export value in 2022, all the other fastening tool products showed growth. In addition, wealso found from the pre-pandemic 2019 to the post-pandemic 2022, the export value of Taiwan fastening tools to the world wasgrowing steadily every year.
The statistics reveal that Taiwan fastening tool industry has maintained its growth momentum in the face of global changes in economy,
politics, and health care over the past four years, and it is a strong and resilient industry. With the overseas demand for DIY, construction,auto repair, shipbuilding, and passenger aircraft assembly expected to continue to increase this year, Taiwan’s fastening tool export to theworld should be able to maintain growth momentum in 2023. From Tables 1 to 5, it can be observed that the U.S., Germany and China
are the top three destinations for Taiwan’s fastening tools. In 2022, the Chinese market tightened significantly due to intense domestic
surveillance, resulting in a significant negative growth in the export value of Taiwan fastening tools to China.
From a broader perspective, according to Industry Research, the global market scale for fastening power tools could reach US$995
million in 2022 and grow at a compound annual growth rate of 3.7% to US$1.24 billion by 2028. In the backdrop of continuing growthin the fastening tool market, a wrench manufacturer in Taiwan has taken advantage of business opportunities from this year's trade shows
to promote products to overseas readers early in the first quarter of 2023, by appearing in the pre-show promotion feature in this magazine.
Read our report on Kang Tai Industrial for more detail.
Taiwan mainly provides small-quantity, diverse and customized hand tools. Although the number of Taiwanese hand tool companies
listed on Taiwan Stock Exchange is fewer than that of fastener companies, a noteworthy case story that successfully made it into Taiwan
Stock Exchange is Eclatorq Technology, which is a joint venture co-invested by 11 industry-leading hand tool manufacturers from Taiwan on
ITRI’s invitation. The company has integrated AI, AR/VR, Big Data, and IoT into hand tools, and by forming a group, they have completed
industrial transformation and upgrade, raising product value and profit.Editorial >>Rank
Table 1:
Taiwan's "820411 Non-adjustable Manual
Spanners & Wrenches"
Exports to the World (US$)

2019

2020

2021

2022

World

186,105,470

173,069,760

218,971,362

248,327,886

13.41%

1

U.S.A

64,662,862

59,771,918

73,632,510

95,834,401

30.15%

2

Germany

15,092,697

14,994,335

18,587,964

21,417,869

15.22%

3China

4,073,735

10,672,076

15,824,738

16,171,532

2.19%

2019

2020

2021

2022

World

100,075,075

101,588,499

125,281,158

133,993,268

6.95%

1U.S.A

30,767,990

36,629,618

43,400,898

49,545,707

14.16%

2

China

6,549,246

8,576,650

11,860,696

8,634,702-27.20%3Australia

4,302,315

4,523,387

6,287,858

6,655,864

5.85%

Rank

Destination

2019

2020

2021

2022

World

364,342,036

343,068,376

462,628,925

467,668,894

1.09%

1

U.S.A

148,561,113

158,108,524

218,667,988

222,591,134

1.79%

2

China

42,200,364

41,669,900

50,305,032

42,617,237-15.28%3

Germany

19,146,291

18,323,675

22,986,981

21,341,349-7.16%

Rank

Destination

2019

2020

2021

2022

World

76,171,000

78,367,182

101,703,594

111,962,433

10.09%

1U.S.A

36,641,441

44,550,343

58,521,952

72,650,058

24.14%

2Japan

3,262,164

3,179,571

3,432,288

3,382,704-1.44%

3China

3,184,021

3,448,303

3,530,694

3,195,959-9.48%

2019

2020

2021

2022

World

102,961,472

104,561,139

121,534,559

114,768,320-5.57%

1

U.S.A

32,902,922

37,891,625

46,810,146

42,860,272-8.44%

2

China

11,484,786

11,978,332

15,488,568

9,997,258-35.45%

3

Germany

9,983,822

10,158,866

10,217,197

7,991,598-21.78%

Rank
Table 2:
Taiwan's "820412Adjustable Manual
Spanners & Wrenches"
Export to the World (US$)

Table 3:
Taiwan's "820420 - SocketWrenches" Export to theWorld (US$)

Table 4:
Taiwan's "820540Screwdriver" Export to theWorld (US$)

Rank

Hardware & Fastener Components - no.57/2023

Table 5:
Taiwan's "820790 - Bits andTapping Tools" Export tothe World (US$)

112

Destination

Destination

Destination

2022 YoY Growth2022 YoY Growth2022 YoY Growth2022 YoY Growth2022 YoY Growth

The Fastening Tool Industry in the Trend of Environmental Protection
In recent years, the global environmental awareness has been increasing, and Taiwan's hand tool companies, mainly OEMs, are naturally
facing the pressure of carbon reduction and rising material costs from overseas customers. Compared with Taiwan, many other countries
move faster and have started to save energy and reduce carbon as early as more than a decade ago, and we can reference the practices ofoverseas manufacturers. For example, the German plier manufacturer KNIPEX Group have invested heavily in heat recycling technology andintelligent energy measurement and control technology since 2009, to recycle the heat generated during the material annealing process andinject it into their own heating system, with a recycling rate of 10%.
In addition to using recycled materials to produce products, Stanley Black & Decker, a major public company, invested in additive
manufacturing technology in February 2022 and purchased the first metal additive manufacturing machine, also known as a 3D printer,
which is an industry innovation.
Snap-On, another major public company, has invested in AI algorithms to reduce the use of packaging materials and reduce carbonemission. They use a "carton management system" to measure the size of boxes, assign them to the appropriate packing stations, and thenreplenish them as they are used. They have six packing stations and three carton racks for various sizes of boxes, all of which are prescheduled through AI that analyzes historical orders.
Whether you choose to reduce carbon emission on a fastening tool product (direct approach), or on the manufacturing process (indirectapproach), by pairing with a digital analysis system, this intelligent upgrade can reduce production costs and increase profit margins, and geta big slice of the market in the current overseas trend of environmental protection. Especially in Europe where environmental awareness isthe strongest, your carbon reduction can create quid pro quo with European buyers and you will get their attention first!

Editorial >>Growth Opportunities for Automotive Parts and Fastening Tools:
Demand for Vehicle Maintenance
The global market is still short of chips and new cars, and coupled with inflation, consumers are turning to buying used cars or extending
the use of old cars they currently own. This means the demand for repair of vehicle parts will increase, which in turn will drive the sales
momentum of vehicle fasteners and fastening tools.
Market research firm ReportLinker released a report indicating that the global automotive repair market will grow from US$750.8
billion in 2021 to US$836.2 billion in 2022 at a compound annual growth rate of 11.4%. This phenomenon is due to the fact that thepandemic has led many companies to restructure and adopt innovative business models and successfully shake off the impact ofthe pandemic. The company forecasts that the automotive repair market will grow at a rate of 10.3% to reach US$1,237.4 billion
by 2026. The future vehicle repair demand is worth the attention!

Fastener Market Battleground
Cost, Profit, Transformation
In 2022, Taiwan's fastener export to the world grew by a whopping 15% to US$6.14 billion, surpassing US$4.31 billion in 2019 before
the pandemic. In other words, the gap in growth between the world’s market reopening and the pre-pandemic period was large at 42%. Inaddition, the weight of fasteners exported from Taiwan to the world only decreased by 0.2% during this period, which is nearly zero decline.
Instead of getting beaten down by the virus, Taiwan's fastener industry rebounded higher and it is as resilient as the fastening tool industry.
Seeing that Taiwan’s fastener export weight remained flat while the export value increased significantly, some analysts said it was because thepandemic pushed some Taiwanese companies to start increasing production of more high-end and high-profit products. This phenomenon isinter-related with the global trend.

Hardware & Fastener Components - no.57/2023

With inflation still lingering, buyers in many countries are seeking lower prices for the same quality to gain price competitiveness. Not
only Taiwan suppliers are experiencing this, so are those in other countries. In addition, after the EU announced the carbon tax will beofficially implemented in 2026, many manufacturers selling to Europe are speeding up their response. In the face of cost pressure and thefuture challenge of carbon tax, some Taiwanese manufacturers are calling for the industry to reduce cost, lift profit margin, and acceleratetransformation. The faster ones will get a bigger share of the pie in this era of great change. This could also be reference for global suppliers.

114

Editorial >>Values of Fasteners Exported from Taiwan to the World (USD)
Target

2019

2020

2021

2022

World

4,316,380,032

3,969,114,428

5,319,398,407

6,142,147,996

2022 YoY Growth15.47%

Weights of Fasteners Exported from Taiwan to the World (KG)
Target

2019

2020

2021

2022

World

1,479,292,223

1,363,249,857

1,610,697,606

1,607,447,733

2022 YoY Growth-0.20%

Q1 2013 is the Critical Starting Point
Before the 1970s, Taiwan was still producing low quality fasteners. The demand for military screws for the U.S. Army in Vietnam War
brought the birth of a group of first-generation screw factories. In 2003, China replaced Taiwan as the world's largest fastener exporter, and thefastener industry in Taiwan began to transform and upgrade.
From 2008 to 2010, the U.S. quantitativeeasing in response to the financial crisis
was in favor of the export of fasteners from
Taiwan, and the fastener supply chain inTaiwan played its part and achieved record
growth of nearly 50% in export weight andnearly 60% in export value. Next, Taiwanesecompanies are already anticipating foranother quantitative easing in the U.S. in2023~2024, which should bring benefits toTaiwan's export.

Combin ing domest ic a nd overseas
perspectives, Fastener World observed aconsensus that the global market is expected
to fully recover in the second quarter of thisyear at the earliest. However, Taiwanesemanufacturers are not going to wait andthey are already locked on Q1 to go overseas
for purchase orders and hopefully will beable to ship out products in time. Their
first starting point is Fastener Fair Global
with the participation of many Taiwaneseand other overseas exhibitors. Companies
outside of Taiwan have made their moves
earlier by deploying overseas when the
lockdown was lifted last year. Instead oflonging for a quick return of recovery, thebest move is to seize the current opportunity
early!
by Dean Tseng, Fastener World

Hardware & Fastener Components - no.57/2023

From the financial crisis and thepandemic, we can obser ve that thef a s t e n e r s up p l y c h ain in Tai w an
can neutralize economic impact oreven form a V-shaped growth track.
Rather than agonizing about whenthe economy will recover, Taiw anfastener manufacturers should focus
on technological transformation andupgrade, and seek collaboration withothers inside and outside of the fastenerindustr y. They should tr y to trigger
neutralization and V-shaped growthwithin their own enterprises or in thewhole fastener industry as quickly as
possible.

115