Diversify New Territory; Realize One-stop Shopping
SHINI ELECTRIC HEATERS CO., LTD. was established in 1969. On May 21st of the year 2009, Wu Yifu, the founder of Shini Group, cut the rthday cake with his wife for Shinis 40th anniversary. Shini was initially a producer of electric and thermal products. With development for 40 years, Shini have become one of the biggest manufacturers specialized in plastics auxiliary equipment producing and formed a one- stop shopping station. Shini is also the biggest manufacturer of auxiliary equipment all around Taiwan and mainland China.
Shini was a producer of electric heater in the beginning, and extended in the industry of plastics auxiliary equipment. With a company shifting from the OEM business, Shini had built up its own brand and developed from Taiwan to mainland China, further permeated to 54 global overseas markets. Shini owns six series of machines at present, from plastics drying and conveying series to dosing and mixing series, from temperature controlling for moulds to cooling system for machines, from automatic robot to granulating and recycling series. The annual output of drying and suction machine ranks first in the world.
On the eve of 2010 TAIPEI PLAS , we had an exclusive interview with Aki Wu (who is also vice president of the 25th Rubber Machinery Special Commitlee from Taiwan Association of Machinery Industry) about how to get out the lash of the financial crisis and defend depress by struggling.
The Worst is Over
The order of goods dropped almost 30% influenced by global financial crisis in 2009 (31% in Taiwan factory, 31% in Dongguan factory, 28~29% in Ningbo factory, 30% on average), the turnover lost was about 1.73 billion NT$.
The ratio of domestic and overseas sales in Shini is about 75:2, in which Europe market accounts for almost a quarter and that is the same with Asia and the Middle East market. The rest shares are America, Oceania and Africa market.
Of market distribution, mainland China takes up 60%, Taiwan and overseas markets account for 15% and 25% respectively. In overseas markets, the share of Europe, America, Asia, the Middle East, Africa and Oceania is 28%, 17%, 26%, 22%, 7% respectively.
China, India, Brazil, and Iran were less affected by the depression in 2009. As developing countries, they will show strength in economic recovery.
Taking optimistic view on Indian market, Shini has set up subsidiary in India in July, 2009. It focuses on domestic sales and product assembly at first, and will serve the neighboring countries and markets depending on future situation. With the turnover of Brazil market increasing year by year, some countries in Africa and Russia are the key markets this year.
Taiwan market got poor in about December, 2008. The same is in mainland China in October. As the order of goods dropped 60~70%, reduction of staff and digestion of inventory was launched from January to July, 2009. Because of lack of raw materials (low inventory) and workers, there were not enough products for the orders from August. Up to now, the production capacity has not yet back to the peak. The number of employees has been returned to 80~85% of its peak and the lack of materials has alleviated. These can meet customers requirement temporarily.
From July, 2009, the domestic and abroad orders have increased a lot. According to recent reaction of the agents at home and abroad, "have confidence in 2010!" said Aki Wu, who is cautious and optimistic about the future situation. We believe that the worst is over, and the shipped goods of the first two months in 2010 have been back to 85~90% of its peak in 2008.
"The best situation of this year (2010) is to reach the peak level in the year 2008 and at least 90% of it probably."
Annual Output of Dryer and Auto Loader Ranks First
According to the assessment of industry, Shinis output of Dryer and Auto Loader exceeds 20,000 units which may rank first in the world. Aki Wu indicates that it is recognition and also one of the goals of Shini.
The operation principle of Shini: Focusing on Particular Business, Pursuing to be the World Leader. Although the output of Dryer and Auto Loader has ranked first in the world, there is still much room for improvement regarding to the turnover. Large international companies in plastic auxiliary equipment manufacturing are: Conair of America, Matsui of Japan, German and Italian plants. Because of high unit price, their turnover is two times of that of Shini.
Specific strategy is to consolidate the existing markets as well as open up new markets, and provide more diversified products to expand revenue. Future efforts should focus on enlarging own-brand management and the current market share.
To open up emerging markets such as Russia, Africa, Southern Europe and Middle East because of low market shares or good prospects. The excellent examples are India and Brazil market.
New Business Territory, One-Stop Shopping
On diversified operation, Automation Business Department was set up to focus on designing and producing Robots as well as integration of production and system. Established Hot Runner and Rotary Valve Business Department increase sales based on existing marketing channels. "To make Shini the complete one-stop shopping supplier for customers”, and grow with business partners.
Both expanding market share and diversification of related products are essential to companys growth. The input will be increased if the market is large enough. There are almost 54 sales distributors all around the world and 43 in mainland China.
Robots met the client for the first time at the venue. In order to meet the customers demand for molding machine, we provide one-stop shopping concept to shorten purchasing time. The idea of manufacturing Robots formed in 2004. Automation Business Department, set up on August 1st, 2008 is responsible for R&D, manufacturing and marketing of robot. The whole series were researched and developed and put in mass production in 2009. To November, 2009, 100 units have been sold. The expected annual sales will exceed 1,000 units with stable sales channels and product quality in 2010.
2010-Production Capacity Increased, Soft Competitions Constructed
Shini is a plastic auxiliary equipment manufacturer that holds the biggest market share in Taiwan. Aki Wu is the corporate president who charges Taiwan market. Operation in mainland China has a history of 17 years, and it is now the largest plastic auxiliary equipment manufacturer in the mainland with an increasing turnover and production scale. In Dongguan, Shini Group is affirmed by local government as a Benchmarking Enterprise and taxpayer. Shini Plastics Technologies in Dongguan was established to be responsible for South China (south of the Langtze River) and overseas markets. Shini Plastics technology in Ningbo (Pinghu factory in future) was set up to charge Central and North China markets, whose subject are mainland manufacturers, businessmen from Hong Kong and Taiwan.
Each of the three plants cross strait have division of labor and is in charge of different markets. Some raw materials (components) are produced by one factory and assembled by all three plants; Production and sales of certain equipment is carried out by different factories.
Never be desperate of reality. Influenced by global financial crisis last year, performance at home and abroad declined synchronously for the first time. Aki Wu has an optimistic view of this crisis, and the group can ride out depending on its financial ability and organization within half or one year. Regarding to low spirit of others, Shini has spent more energy to increase production capacity and efficiency as well as quality stability.
Before 2008, Shini was keeping a growth rate of more than 10%. As production capacity could not keep up with sales growth, company "ran behind of the order". To solve the shortage of production capacity, we have expanded Dongguan Plant of 20,000m2 (original 52,000m2) in 2009. In addition, Zhejiang Pinghu Plant, the largest plastics auxiliary equipment plant with 36,000m2 has been built by Shini, which is expected to put into operation in early 2010. The expansion of Taipei Plant was completed in the end of 2009. With the total expansion of 50,000m2, the production capacity of Shini Group will be doubled in 2010. Shini has prepared for hard competitions and is ready for more orders in economic recovery.
Construction of Soft Competitions. The number of orders grows slowly because of the impact of financial crisis. It is an opportunity for Shini to adjust the internal constitution and improve the Soft Competitions by putting a lot of manpower and resources. In management, certain measures have been carried out such as promotion of ISO-9001 rebuilding, introduction of internal audit & control and ERP ( German SAP system which cost 16 million), eCommerce, eLearning, and introduction of bar code system and management of cost center and profit center. At the same time, training for cadres and general staffs is promoted to enhance efficiency; R&D department has bear fruit by reengineering R&D process and knowledge management.
Focus on Environmental Protection, High-tech & Medical Industry
Environmental protection and high-tech will be the trend in plastics industry, and medical equipment industry is also an attractive area. Aki Wu points out that the latest trend for plastics auxiliary equipment is the development with environmental protection, energy saving, automation and high efficiency.
To copy with future development, refrigerant R22 of the chiller will be replaced by refrigerant R134a, R407C and R410A to meet market demand. In addition, the development of Rapid Heating & Cooling controller reduces significantly the post-processing costs; the use of hot air recycling technology reduces the energy consumption of the dryer; sorts of granulator and recycling system can reuse the plastic; magnetic drive pump instead of traditional shaft seal pump will reduce the artificial input for regular maintenance.
Introduction of Four New Exhibits
It is time for Shini to submit the transcript at each exhibition and release demanded productions of the market. There will be four new exhibits for 2010 TAIPEI PLAS.
Gravimetric Blender(SGB): with automated high precision function of continuous weighing and mixing, it will enhance production capacity and product quality and reduce labor input.
Loss-In-Weigh Meter Regulator(SLIW): combining with extruder to achieve the control of pressure totally.
All Axis Servo Robot(ST): five-axis high-precision positioning and robots arranged.
Cooled Water Chillers(SIC): meet environmental require-ment by adoption of environmental friendly refrigerant.
Operation of Brand Value, Focusing On Innovation
The R&D headquarter of Shini is located in Dongguan. The technological threshold of plastics auxiliary equipment is low, so Shini focuses its attention on operating and protecting the brand awareness. "Creating brand value to produce profits first, and then put into R&D of new products", said Aki Wu. There is no much difference whether the R&D headquarter is located in Taiwan or mainland China; so it was placed in Dongguan.
Shini Group is the largest manufacturer of plastics auxiliary equipment in the mainland, and has a competitive price compared with other products. "This is the brand value" and the profit from it can be put into research and development of new products. Investment in the mainland China dated from 1992, and there exist few injection molding machine manufacturers. Shini has participated actively in exhibitions to promote products and the brand awareness. Fortunately, with the vigorous development of molding machines, and early entry as well as focus on particular business, Shinis position in the market has gone up.
Shini Plastics Technologies Group set up the Corporate Strategic Center focusing on product development and global marketing. At present, the R&D team has 41 full-time staffs, in which 30 persons are for plastics auxiliary equipment, 8 persons for robots and 3 persons for hot runner. There are about 5 or 6 projects for new product development, optimization of existing products and improvement of dryers. Continuous cooperation with universities and research institutions is carried on. At the same time cross-industry cooperation is helpful for developing new products.
In addition, Shini is in cooperation with advanced enterprises abroad: joint development of new products, improvement of the design after having access to the licensed technologies, for instance, former technical cooperation with Italian plants in producing conveying belts; the latest cooperation with Japanese plants.
Dedicated, Customized Assurance for Market Opportunities
Molding machine manufacturers in mainland China usually adopts the distribution model that the distributors sell the products to the end-users after purchasing from the manufacturer and pay them in cash or part of credits. Although profits are shared by the distributor with this model, it ensures return of accounts and efficiency. There is no need worry about problems on accounts as turnover is increasing.
However, molding machine manufacturers in Taiwan and Hong Kong are generally based on direct sales. It is necessary to consider about accounts receivable and cash flow which causes transfer of orders time after time. As incomes increasing in mainland China, people need more accurate and special machines, which offers a optimistic prospect for plastics auxiliary equipment manufacturers in Taiwan.
As Shinis investment in processing machinery (CNC machine for instance ), price is not the only consideration, and the more important is cost performance. Because of various sorts of plastic materials and different molding methods, the standard injection machine can not be applied in all fields. The plant should focus on specific or customized injection machine fitting for special materials, products or processes. Accompanied with credits and after-sales service, there are also opportunities for Shini occupying a place in mainland China.
Never End the Pursuit of Progress
Shini will witness significant changes by the built and completion of soft and hard competitions. R&D in one place, manufactured in five plants and global marketing may realized in future: from production-oriented to technology-oriented, from manufacture-oriented to service innovation, from a local company to an international enterprise. "In Shini, there is only struggling, no depressing! " said Aki Wu.
"For Shinis next 40 years, we are all ready! " This sentence was written in the special publications for Shinis 40th anniversary.
"Never end the pursuit of progress", he said. Thereshould be new equipment for new factories, training fornew employees, and new management for enlarged organization. To keep pace with the times, concepts should be updated constantly, and the pursuit of progress is endless.
For more details please visit website:
- How to Select Plastics Auxiliary Equipment ─ Drying and Dehumidifying
- SHINI Central Material Processing System
- Shini Efforts on CFC-free Refrigerants
- Introduction of Basic Knowledge on Refrigeration
- SHINI Grinding Technology with High-efficiency and Safety
- About Hot Runner Business Department
- About Pneumatic Conveying Business Department
- About Shini Turkey
- About Shini Vietnam
- SHINI Dongguan Engineering Team
If you want to read other articles, back to2010 Quarter 2 Issue 3.