Report by Wang,Shang-yi
Taiwan’s leading screw manufacturer, ” Pro Power CO., Ltd.,” is one of the top companies in the Gangshan Dist. Chairman Chen Zhi-Yuan of Pro Power has a unique approach to business that has often been stereotype “price competition.” However, it remains unclear whether this is simply a case of cutting prices or a difference in strategic thinking. In today’s “Screw Leader Interview,” we will introduce Chairman Chen Zhi-yuan’s business philosophy.
This year, screw orders have significantly declined, and the market is in a state of despair. However, Pro Power’s orders have’t only remained stable but have actually increased. When discussing this, Chairman Chen Zhi-Yuan mentioned that it is not necessarily related to the price of the orders. Some customers have saturated inventories and do not have a need for new orders. Fortunately, another group of customers reduced their orders last year. Therefore, this year, there has been a significant rebound in orders, largely due to luck.
As for Pro Power’s unique distribution strategy, Chen Zhi-Yuan pointed out that in the past, China market was not yet mature, At that time, the screw from Taiwan exports were always in a seller’s market. However, with the rise of competitors and the high steel prices in Taiwan leading to a loss of competitiveness, standard product suppliers who fail to adjust their sales strategies will find it increasingly difficult to survive. For Pro Power, their sales strategy is based on quantity-based pricing, and consistently securing multiple orders throughout the year is the best proof of their success.
“Instead of just thinking about how to sell inventory, it’s better to brainstorm strategies with customers,” Chen Zhi-Yuan said. Small screw exports mainly target retailers or importers, and the traditional thinking is to focus on getting sales orders. However, the problem arises when there is no demand at the end-user level. How can the inventory be cleared? Therefore, Pro Power often collaborates with customers to discuss sales strategies. As long as the customer’s inventory can be successfully cleared, even during an economic downturn, the impact of order reduction will also be minimized.
Chen Zhi-Yuan remarks that he can only laugh off the various opinions in the market and the industry’s stereotypical impression of Pro Power. After all, when the overall market conditions are unfavorable, price competition often happens under the table. Moreover, with the continuous decline in material prices this year, the production costs for most screw factories are not high. Whether to pursue thin profit margins through high sales volume or reduce production to maintain profitability depends entirely on the company’s sales strategy. It is impossible to achieve a market consensus.
Regarding this year’s market, Chen Zhi-Yuan candidly admits that he doesn’t have high expectations but considers the current market conditions as normal and something they have to accept. The main reason is the repeat orders from overseas customers in the past two years, combined with the easing of container congestion from last year, resulting in a huge accumulation of inventory for foreign customers. Additionally, the decline in steel prices has affected the purchasing willingness of foreign buyers. Therefore, the slowdown in order demand this year was anticipated.
Pro Power CO., Ltd., is a major manufacturer of wood screws for Taiwan, exporting directly to the US retail industry. With decades of manufacturing experience, they can also assist customers in producing customized products.
Cover picture by Wang,Shang-yi