The Asian currency slide has reduced prices for molds from Taiwan, which competes in the U.S. market against Portugal as a source for imported molds.
``At this point, we feel we're much more competitive than Portugal,'' said Troy Lewis, president of Sunbo Corp., the largest importer of molds from Taiwan and China into the United States.
``In molds right now [from Taiwan], there's a 10 percent reduction'' in price, Lewis said. ``We have normally been about 20-25 percent less than the U.S. market, and now in the last five months we're about a third less.''
Lewis was a founder of Sunbo in Bellevue, Wash., which began importing molds from Taiwan 12 years ago. Lewis said it took time to find the relatively few mold makers there who would meet U.S. quality standards. He pegs that number at about 100 firms out of 40,000.
In China the number is even smaller—fewer than a dozen, with most of those in Hong Kong — but Lewis said Sunbo has stepped up its activity there. Today, about half of Sunbo's mold sales come from Taiwan and the other half from China, he said.
In late 1997, Sunbo became a partner in a mold factory in Shanghai with a Chinese company, Long Chou. Lewis said General Motors Corp. has approved the plant to supply molds to its car factory in Shanghai.
With Taiwan, Lewis has fought the wars, working to find good mold makers and selling the idea to U.S. injection molders often skeptical of Taiwanese quality.
If molds from Taiwan was a radical thought among U.S. molders, what about the future of importing molds from China?
Lewis said it can happen — but only if China devalues its currency. Right now, molds from China cost about the same as molds from Taiwan, or one-third the price of U.S. molds. But, to find U.S. buyers, Chinese molds will have to be 50 percent less, he said.
China has been hesitant to devalue its currency, fearing it could destabilize economies of the other Asian countries even more. But Lewis thinks China will have no choice.
``China is going to lose 30 percent of their businesses if they don't have some kind of adjustment. So everybody I've spoken with thinks that, by June, China will do a devaluation,'' he said.
As for Taiwan molds, the rising cost of mold parts that Taiwanese firms import have partially offset declines in the Taiwan dollar.
``The currency in Taiwan has basically leveled out at about a 15 percent reduction. But for our market, because the components, the steel, the ejector pins and everything else are from the U.S. market and the Canadian market, that hasn't affected the pricing. So the net result is about a 7-10 percent reduction in costs,'' Lewis said.