Cover Story

Sheh Fung Screws Now in Vietnam“5 Arrows” Targeting New Heights Via High Value-adds

The new year kicks off with Sheh Fung announcing anticipated news to global buyers! The company,
topping the industry as a major fastener player with exclusive painting craftsmanship, spent NTD
1.2 billion on a new plant in Vietnam which broke ground at the beginning of Dec., 2022 and wasfounded at the end of 2023. The plant spans 200,000m2 and 25% of the area is in use in phase 1. It will start
production officially from Jan., 2024, and is expected to utilize the area in full in 5 years. Fastener World
brings you the latest development with our interview with General Manager Kent Chen from the headquarters
and Manager Mr. Sosa Yang from the Vietnam plant.
So why in Vietnam? Kent laid out 4 reasons.
First, he sees the value that Formosa Ha Tinh
Steel Corporation, now mass-producing steadily inVietnam, sources steel and technology from Taiwan
CSC. “Prosperous local proliferation of industrial
products will not do without a premium steel plant.
Wherever a good steel plant is at, fasteners follow—that will be the future for Southeast Asia,” said Kent.
Second, Vietnam can provide a larger manufacturing area,
enabling higher flexibility for future business deployment.
Third, Vietnam has a young and active population. Fourth,the EU-Vietnam Free Trade Agreement (EVFTA) allows
products going from Vietnam to EU at zero tariff and will be aniche for Sheh Fung.

200,000 m 2

Initially, the new plant will reach 600 to 800 tons in monthly capacity and have 150 employees, equipped with 80 pieces ofequipment handling heat treatment, electroplating, painting and more. Additionally, it is located in Phan Thiết City of Bình ThuậnProvince, 180 kilometers from Ho Chi Minh City, a 2-hour drive via highway, providing convenient access to traffic.
Sosa pointed out that the Vietnam plant and Taiwan headquarters have different market positioning. Broadly speaking, theVietnam plant extends from Taiwan headquarters to be a production base; the headquarters will essentially take orders. In detail,the Vietnam plant will specifically manufacture wood screws and self-drilling screws in phase 1, then introduce wire drawing lines
in phase 2, manufacture automotive fasteners in phase 3, with other fastener types to be planned onwards. Further, the target clientsare different. The Vietnam plant by design provides price-competitive as well as high quality products. Sheh Fung sketched out “5Arrows” to launch business growth for the Vietnam plant.

“5 Arrows” for Vietnam Plant’s Business Growth⁄⁄⁄⁄⁄ Vietnam plant spreads out geopolitical risks and a full-fledged Vietnam regional
economic and trade agreement helps attract orders and deploy in markets

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Fastener World no.204/2024 惠達雜誌

Cover Story
The Vietnam plant was planned 3 years before COVID outbreak and geopolitics wasn’t much of a sensitive issue back then. Then, its
founding at the end of 2022 coincided with heightened tension in Asia. Kent thinks it will bring critical growth momentum and advantages
for the Vietnam plant. “The plant appears when clients long for Taiwanese suppliers to add overseas plants,” said Kent, “If there’s anoverseas production base outside of the supply chain in Taiwan, it will boost confidence in placing orders to us and clients will be more
willing to include us as part of their strategy planning.” Besides, thanks to EVFTA, the Vietnam plant can export to Europe at zero tariff.
Additionally, in contrast to the fact that Canada currently imposes anti-dumping
tariff on Taiwan, the fastener trade between Vietnam and Canada is subject tono tariff, thereby providing advantages for the Vietnam plant.

⁄⁄⁄⁄⁄ Increase expenditure and capacity tostrengthen economies of scale

Opposite to the headquarters providing low-volume and diverse
products, the Vietnam plant’s production line is designed to mass-produce
in low diversity. Utilizing mass-production in the initial phase in a newmarket like Vietnam can boost the plant’s momentum, Kent explained.
Therefore, Sheh Fung introduces a lot of equipment and local talents
to the plant to expand capacity and strengthen economies of scale.
The plant will rise into one of the key fastener manufacturing hubs
in Southeast Asia.

⁄⁄⁄⁄⁄ One-stop Production and High Valueadd Coated Screws

The Vietnam plant combines production, post-processing, quality check,labor,” said Kent. He figures labor costs in Vietnam
packaging and provides global buyers with one-stop manufacturing process andwill rise in the future, so he thinks all Vietnameseworld-class service. On another note, Kent observed the fact that Vietnam isfactories will have to integrate IoT to optimize
mostly constrained to producing low-end products, but he wants to provide
production lines and manpower, and improve labors’high value-add coated products. To that, the plant is added with coating
technical skills to cope with cost uptrends.
equipment. “We don’t want clients to have the impression that the Vietnam⁄⁄⁄⁄⁄ Pioneer Strategy— Creating Shehplant only produces low-end products. Our message to global buyers isthat this plant will be able to produce the same level of products as withFung’s “Satellite Plants”
our headquarters. By the way, for anyone demanding a specific size at
The Vietnam plant will replicate Taiwan fastener supply
large volume, this plant can handle your needs,” said Kent.
chain. Kent is inviting collaborators interested in tapping

into Vietnam to form satellite plants within the Vietnam plant.
Sheh Fung will offer collaborators the land, information, fund
Kent is planning to make this plant unmanned and introduce
arrangements, and factory construction permit handling, to switch
automated guided vehicles (AVG), which is on trial test. “I’mfrom outsourcing to in-plant production and help collaborators
going for IoT which I have introduced in some parts of theconnect with the world. “We have many partners in Taiwan who
headquarters. I’m also using IoT to make the Vietnam plant
may want to go in Vietnam. I want to give them a platform to build
efficiency-optimized and use automation to optimize
their own plants within our Vietnam plant area. I hope I will be able
manpower deployment. Now China pays employees higher
to help them and in turn help ourselves. Like Taiwan with the world’s
than Taiwan does. If we don’t upgrade and transform andmost complete fastener supply chain, Sheh Fung will build its own valuedeploy for our plants, at the end of the day we’d still have toadded supply chain. If this replication is successful, I’m looking forward
put a plant in another country and face the same problems.
to seeing Taiwan fastener industry bloom and shine in Vietnam!”
We can’t base production strengths solely on cheap⁄⁄⁄⁄⁄ Industry 4.0, unmanned factory and AVG

CBAM in Pilot Phase and Sheh Fung is Ready now!
Sheh Fung launched carbon inventory 2 years ago and set up a CBAM
workforce to track information from EU and provide required data. Kent said:“The SAP system we use helps a lot in this field. We can quickly export carbon
emission data and table templates from the system to EU CBAM declarants. It
lightens our burden and we can effectively offer overseas buyers real-time andaccurate information. CBAM comes on short notice but we have acted early andhave no problem with it.”Contact: Sales Assistant VP, Rita Su
Email：rita_su@shehfung.com

Moreover, Sheh Fung has been verified by a 3rd-party and will work with EUdesignated verification bodies in the future. It will also apply for becoming a “voluntarydeclarant” under EU regulation compliance to provide EU with related information. It
is 100% ready for the future global carbon reduction economy and will become the toppartner for global buyers!
Copyright owned by Fastener World / Article by Dean Tseng惠達雜誌 Fastener World no.204/2024065