CBAM, the Next Breakthrough for Taiwan Fastener Industry - FASTENER EUROPE MAGAZINE
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CBAM, the Next Breakthrough for Taiwan Fastener Industry

by Dean Tseng
Editor of Fastener World Inc.


In a recent interview, a Taiwanese business owner expressed that Taiwan is in a time of five shortages (of water, electricity, labor, land, and talents), as well as the dominance of IT Industry. He estimated that in about 5 to 7 years, Taiwan's labor costs will increase significantly. Before this happens, it is necessary to prepare for the rainy day and plan ahead.

During Fastener World’s visit to Hannover Messe 2024, we observed some major industry trends, and the first among them is Industry 4.0, Smart Manufacturing, Automation, and Robotics. A variety of metal parts processing and precision equipment displayed at the show allowed visitors to see the efforts of manufacturers in pursuit of excellence in technology and know-how. The second trend is EVs and peripheral charging/storage equipment. The third is the development of new energy. Many market-leading manufacturers are deploying for the next 5-10 years, and at the same time actively implementing compliance to CBAM and environmental protection.

Carbon reduction is undoubtedly the biggest challenge facing all export-oriented industries. Many Taiwanese companies have been working hard to comply with the regulations. This is a good thing for Taiwan fastener industry. If CBAM and ESG compliance can be thoroughly implemented into the entire supply chain, it will lift the position of Taiwan fastener industry and the world will recognize that Taiwan is a worthy partner. There are already Taiwanese fastener companies that have introduced supporting measures for green manufacturing processes.

To get closer to local markets, many Taiwanese manufacturers have set up factories overseas, but it doesn’t guarantee an escape from the impact of anti-dumping. For example, recently there have been rumors that the U.S. may impose high tariffs on Chinese automobiles produced in Mexico, and if it happens, the prices of the products are bound to go up and drain up benefits. In addition, many Taiwanese manufacturers are also considering investing in ASEAN markets such as Vietnam to export to Europe and the U.S. In a short term, they can benefit from the FTA agreements signed between Vietnam and other countries. However, the Chinese products still have a price advantage, so in the long run, relying solely on exports will be very risky for manufacturers if they do not simultaneously develop the domestic market. This is especially true for more competitive items such as construction screws and automobile fasteners. Instead of focusing on a single country or region, they should put the whole world in perspective.

Compared to large plants with sufficient capital, small and medium-sized processing plants are more likely to be affected by market climate. It is more difficult for them to increase profits, so that's why they have to be more proactive in transforming themselves. Taiwan's high-tech industry has its own 10-year plan. Taiwan fastener industry needs to draw up a plan as well. The emergence of CBAM is an excellent opportunity to transform. Although it incurs a lot of investment in manpower and capital and puts the pressure on manufacturers, international partners will come to understand Taiwan's determination to help customers enhance the value of their products.