Mr. Joe Chang - Carrying On and Expanding a Family Tradition


2007-09-28
Mr. Joe Chang is the General Manager of Kuang Yung Machinery and is another example of a successful transition of a Taiwanese woodworking machinery manufacturer to the second generation of a family business. The company was established in 1960 by Joe Chang's father, Mr. C.J. Chang and manufacture rip saws. Joe Chang recalls, during his school days, that he was naturally interested in his father's machines and would spend a couple of hours after school every day in the factory. Whilst Joe Chang's study major was business, he knew that it would be necessary to have a firm understanding of the basic workings of the saws their assembly and what problems could occur. As Joe Chang explained: "At the time, we were mainly selling our machines locally and I knew that it was important to be able to explain clearly to our customers about each machine's functions." His childhood interest proved to be a valuable asset in helping to answer customer questions. A Truly Family Affair Joe Chang began working in the company in the late 1980's and was responsible for sales to the local market. At the time, the main products were simple cut-off saws that were also being sold ODM to Jet in the U.S.A. Joe Chang's uncle, the late Mr. L.C. Chou, was the Export Director of Kuang Yung, a former Chairman of the Taiwanese Woodworking Machinery Association (TWMA) and a very famous and well-respected figure in the industry. He was one of the pioneers from Taiwan to begin selling heavy duty DIY table saws to the U.S.A. In fact, from 1985 ~ 1995, sales of these saws really boosted Kuang Yung’s business. Joe Chang is eternally thankful to his uncle for his many years of patience in educating him about many aspects of the business, particularly exporting. Mr. L.C. Chou had successfully begun to break into other export markets in South-east Asia such as Malaysia and more importantly, Indonesia. Kuang Yung is truly a 'family enterprise' in that Joe Chang's younger sister worked for many years as the company's R&D manager and, more recently, was promoted to her current position as factory manager. Looking Outside Taiwan Kuang Yung began participating in international exhibitions in 1989 with a show in Indonesia. Joe Chang recalls: "At the time, the Indonesian government changed their policy concerning the export of timber. That is, it was basically banned. This, in turn, created a surge in the Indonesian woodworking market. Many Taiwanese woodworking machinery manufacturers began to make good business with Indonesian customers at that time." For Kuang Yung, this was truly the start of a much bigger role as a woodworking machinery exporter. Naturally, as their machines are the 'second step' in wood processing, they became essential in Indonesia and in other markets. Before 1993, Joe Chang and Kuang Yung felt that the quality of their machinery had improved enough to be able to look at markets outside South-east Asia. Joe Chang explained: "We had a strong and stable business in the Asian region but also felt that we should not 'put all our eggs in one basket'. We felt confident enough to tackle the U.S. market and were lucky to establish an agent there Northtech Machinery." Northtech Machinery continues to be Kuang Yung's agent to this day. Come the Anaheim and Toronto exhibitions in 1993, Kuang Yung had already successfully sold some of the larger straight-line rip saws in the U.S. and felt it was time to participate in the two main North American shows for the first time. Joe Chang recalls: "At the time, American customers were not buying too many machines from Taiwan. We were lucky in that we had a good agent and had already sold some machines." Joe Chang teamed up with his friend, Mr. Michael Chang, C.E.O. of Leadermac Machinery to travel and exhibit together for the first time at the 1993 shows. "As Leadermac are a quality producer of moulders and we manufacture rip-saws, it was good for us to exhibit together," Joe Chang reminisced. Joe Chang and Michael Chang have continued to exhibit together every two years since then at the shows in North America as well as beginning in 1995 at LIGNA. "Both Michael and I shared and ambition for our machines to be more popular in North America and Europe. We were able to share information, too." Joe laughed: "In the early days, we would even share the same hotel room to save money!" Joe Chang explained that, in those early days, Kuang Yung was more successful that Leadermac in the U.S. market with Leadermac initially, i.e. before the year 2000, being very strong in Europe. The 1997 Asian financial crisis dealt a serious blow to many Taiwanese woodworking machinery manufacturers. Joe Chang said that there was a 40% ~ 60% drop in sales and profit dropped to as low as only 15%. Kuang Yung's idea to not 'put all their eggs in the one basked' had been a wise one. "I know of many Taiwanese woodworking machinery manufacturers that did not survive the 1997 financial crash. We were lucky," said Joe Chang. Kuang Yung was able to sell more expensive machines to the U.S.A., rather than mass-producing for just South-east Asia with small profits. In fact, the company was the first from Taiwan to sell straight-line rip saws to the U.S.A. "Our biggest hurdle was that customers in the U.S.A. and Canada did not trust the quality of Taiwanese machines. They had traditionally only ever bought locally-made products," Joe Chang explained, "We had to work very hard to win the trust of customers in North America." Branding and Further Internationalization Four years ago, Kuang Yung adopted their 'Primo’ brand. When asked why, Joe Chang said: "We knew that our company name is not easy for foreign customers to say and also that we noticed some companies in China that were copying our machines. We needed to protect our 'brand' and so we started using 'Primo'." This was also a necessary step in that, from 1998, Kuang Yung had begun to develop much more high-tech machines with NC-control systems that were developed in-house. "Because of this control system, it was very difficult for others to copy our machines," Joe Chang said. NC-based machines, in 2007, accounts for 25% ~ 30% of total sales and Joe Chang feels that it will very quickly make up 70% of sales. Kuang Yung's move to have a 'Western brand' is a move that has more recently also been adopted by many others in the Taiwanese woodworking machinery industry. Current and Future Export Markets Kuang Yung's sales are currently broken down as: North America 25%, South-east Asia 20%, China 15%, Europe 8%, South America 6%, North-east Asia (Japan and South Korea) 5%, Africa (including South Africa) 6%, India 2%, Russia 4%, local Taiwan 3% and other areas 6%. All of Kuang Yung's export sales are through their worldwide network of agents. When asked about future potential markets, Joe Chang explained: "I think that India has biggest potential for us. Also, markets in South America and Eastern Europe will become more important. Nowadays, we have new customers in Romania, Slovenia, Poland Russia and Ukraine." New Machines are Vital Joe Chang went on to say that newly improved and developed machines are crucial for the company's continued success and expansion. "It is not possible, in today's market, to keep on manufacturing the same machines, year after year, produce higher quantities and keep cutting the price," Joe Chang said. He also said that it is important to know what kind of machine is suitable for which market and each individual customer. "Customers want machines that can save materials, save on manpower, be user-friendly and also be reasonably priced. In the past, perhaps only German machines could offer such quality and after-sales service. Now, Taiwanese machinery companies have the same ability to support customers," Joe Chang proudly said. New Products are at the Core Kuang Yung has spent years to continually develop the latest technologies in semi-optimized and fully-optimized rip-saws. The company was the first in Taiwan to explore NC-controlled fixed and moveable blades on a saw to better reduce wood waste and efficiency. Joe Chang explained that the same technologies are available in the U.S.A. and Europe, but the machines are unbelievably expensive. Kuang Yung's recent new models are really quite 'smart'. That is, the controller, combined with a laser, can provide the user with an extremely accurate report about the amount of raw wood materials needed for a particular batch run. This provides any manager with not only the cost of materials and labor, but also saves precious wood. All this can be programmed and read using the machines' touch-screen systems. Kuang Yung's latest machine features three digital cameras that calibrate each workpieces' exact measurements which are then automatically fed into the NC-control - within one second. This is a 'fully-optimizing' cut-off saw. After more than one year of testing in a customer's factory, the CFS-200B was released onto the market this year. "We have also built in such features as being able to use video or the Internet for service. The machine also has a unique 'refresh' function for the control and is imbedded with special 'smart' chips," Joe Chang explained. In conclusion, Joe Chang clearly stated that, these days, Taiwanese woodworking machines are well-established and nicely-placed in the mid- to upper-range of the market. "I'm not worried about any competition from Italian machines as Taiwan is much stronger in electronics and a machine's control will be increasingly important." A good point, Joe!
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