Special Feature >>Editorial:

Taiwan Seeks
BreakthroughAmidstChallenges inExport社論：
出口面臨挑戰 台灣尋找2024年突破口
Taiwan is well known as a kingdom of both fasteners and hand tools which respectively take up their own market shares that have influence.
The increase in the world’s demand for these two Taiwanese industries over the past few years has made Taiwan gain more attention in theglobal market. This article does a cross analysis of Taiwanese fastener and hand tool export performance, points out the current andfuture trends, and helps global readers learn Taiwan’s situation and where collaboration is possible.

Hand Tool Companies Expect Orders to Return in H2 2024
Taiwanese Hand Tool Global Export Value
2019

2020

2021

2022

2023 (Forecast)

38

37.6

47.9

46.2

36.7

YoY(%)

-1.8

-0.9

27.4

-3.5

-20.5

Hardware & Fastener Components - no.61/2024

YearExport Value(USD 100 Million)

062 惠達雜誌

Taiwan's global export of hand tools amounted to USD 3.8
billion in 2019, and after reaching a peak of USD 4.79 billion
in 2021, it began a downward trajectory in 2022. The exportvalue reached USD 2.447 billion in the first eight months of2023, and based on that, the full-year export value for 2023
is currently estimated to land at around USD 3.67 billion.
Compared to 2022, the forecast for 2023 is down a whopping
20.5%, virtually canceling out the 27.4% increase in 2021.
In other words, Taiwan's hand tool export in 2023 returned to2019 or 2020 levels.
From this fluctuation in export value, it can be observedthat high overseas inventory level started to wreak havoc
in Taiwan in 2022 and seriously undermined the export
performance of Taiwanese hand tools in 2023. Some local
companies revealed that the first half of 2023 was like being
in a dark tunnel with no sight of light at the end. However,Special Feature >>they seemed to see a ray of hope around November of that year. Overseas customers are still closely watching their inventories,
meaning the the inventory level will remain relatively high in the short term. In addition, with mortgage rates still high, demand in
the construction market has been affected, which in turn has impacted demand in the hand tool market. Local companies estimatethat incoming order may not increase until the second half of this year. This will affect the performance of Taiwan's global export
value of hand tools, making it likely to maintain a downward trend in 2024.

Fastener Companies Anticipate Destocking But Could Face Lower Price
CompetitivenessTaiwanese Fastener Global Export ValueYear
Export Value (USD
100 Million)
YoY(%)

2019

2020

2021

2022

2023

43.1

39.6

53.1

61.4

46-6.9

-8.1

34

15.6

-25

Taiwan's global export of fasteners was USD 4.31 billion
in 2019, and bottomed at USD 3.96 billion in 2020 due to thesevere impact of the pandemic as well as harbor and supply
chain disruption. However, the pandemic brought business
opportunities which redirected purchase orders to Taiwanese
fastener companies starting from 2021, and the world's
demand for Taiwan's fasteners skyrocketed, pushing the export
value to the peak at USD 6.14 billion in 2022, but in the same
year, some local companies observed the phenomenon ofoverstocking by overseas customers. In 2023, the overstocking
took its toll on the Taiwanese companies and caused a sharp
drop in the number of orders. The export value of 2023 fell
25% to USD 4.6 billion, almost back to the level of 2019.
From that, we can tell that the pandemic acted like a doubleedged sword, bringing monumental and record-breaking export records to Taiwanese fastener industry, but also stripped themilestone away from Taiwan as it left. The definitive factor here is the inventory level in the U.S. and Europe and the need to placeorders. Still, we can observe high resilience of Taiwan fastener industry that is able to retain a normal export level a little higher
than before the Covid outbreak.
Taiwanese fastener companies now look at 2024 in two separate ways. The optimists anticipate ongoing destocking at overseas customers
side and believe orders will come in more. The pessimists think, now that Taiwan CSC has raised Q1 price on steels and wire rods, it will
lower Taiwan’s fastener price competitiveness and make it more difficult to attract orders even if overseas inventory level drops.

Taiwan's Export Value (Hand Tools Vs. Fasteners) (Unit: USD 100 Million)
YearHand Tools
Fasteners

201938
43.1

2020
37.6
39.6

2021
47.9
53.1

2022
46.2
61.4

2023
36.7
46

It is not hard to find out the resemblance between hand tools
and fasteners while comparing their export value changes. Thesetwo industries both heavily rely on export. Their export values
both surged in 2020 and plunged in 2023. In other words, highinventory is the Achilles' heel of both industries. On the other
hand, the difference is that Taiwan fastener industry’s export
surge lasted two years (2021 and 2022), while Taiwan hand toolindustry’s export surge lasted one year (2021). The hand toolindustry entered a downward spiral in 2022, one year earlier than
the fastener industry.

惠達雜誌Hardware & Fastener Components - no61/2024

High Resemblance in Hand Tool and Fastener Export Fluctuations

063

Special Feature >>National Coalition + Carbon Reduction,
A Grand Strategy to Break Through Challenges
Although the outlook for those two industries is somewhat bleak, there are some who see this period of downturn as an opportunity to create
the next breakthrough. Take an iconic Taiwanese hand tool manufacturer Proxene for example, it is undergoing a critical transformation led by asuccessor of the second generation. In addition to inaugurating a new NTD 900 million plant in Shengang District (Taichung City of Taiwan) inDecember 2023 to tap into the high-end market, it has introduced MES systems and automated production lines over the years to gradually build
a smart factory. Observing that the hand tool industry is facing succession and carbon reduction problems, it believes that now is the best
time to horizontally integrate the hand tool industry. Therefore, it will take the lead in forming a "Taiwan Hand Tool Coalition" to increase
revenue to USD 159 million in the next five years, and then to USD 319 million through mergers.

Hardware & Fastener Components - no.61/2024

Since CBAM explicitly lists
fasteners as one of the first carbonb o r d e r t a x t a rg e t s , Ta i w a n e s efastener companies have been
focusing on carbon reduction as thenext breakthrough point. Many ofthem have already conducted GHG
inventories and introduced nationalESG carbon reduction resources andplatforms. Some of them can alreadyprovide accurate carbon emissions
data to EU importers. Some arealso planning to replicate Taiwan'sfastener supply chain to Southeast
Asian countries while setting up
factories in Southeast Asia in orderto form an overseas Taiwan fastenercoalition.

064 惠達雜誌

Reading up to this point, you
should find that several years after
Fastener World heard the local
companies voices and called for a
formation of a national coalition,
this concept is now in the planningp h a s e i n t h e f o r m o f Ta i w a n ’sfastener and hand tool coalitions.
Meanwhile, many local companies
have recognized “carbon reduction”
to be a critical factor for them tosurvive in the future. Fastener World
anticipates to see them combine
national coalition and carbon
reduction measures into a grandbusiness deployment tactic and use
it to break the 2023 deadlock.

Copyright owned by Fastener World
Article by Dean Tseng