In the past three years, due to the spread of the new coronavirus since the end of 2019, visits and contact opportunities between OEMs and buyers have ceased, as have various commercial physical exhibitions. Each OEM has had to fend for themselves and showcase their talents to find new business opportunities.
On 13 October 2022, the Ministry of Health and Welfare made the decision to allow foreign nationals to once again come to Taiwan without quarantine, bringing a glimmer of hope to OEMs in the water purifier industry. However, due to the past three years of global competition and operational pressures, in addition to the significant competitor that is mainland China, there are now many more international competitors in the market.
Examples include:
Turkey、Vietnam、India、Russia、Poland
The development and progress of emerging countries in the water purifier industry in recent years is evident to all. With their large domestic markets, abundant manpower, and low labour costs, they are certain to have a considerable impact on Taiwan’s OEM factories.
Several countries around the world exhibit particularly high demand for RO reverse osmosis water purifiers. In Europe, Spain leads the market, followed by Italy. In Africa, Egypt shows the highest demand, while in Asia, it is Vietnam. In the Middle East, Iran is the main country of interest, followed by Dubai, and then Turkey, which spans both Europe and Asia and has a substantial market demand for RO water purification machines.
In Eastern Europe, Russia and Poland are the two countries most invested in the water purification equipment industry. Over the past decade, these countries have evolved from importing all their water purification equipment to establishing factories and manufacturing facilities to produce their own equipment and components. As a result, nearly every company is eager to enter the export market, making this already competitive environment even more vibrant.
We will now discuss and analyse these competitor countries:
1. Turkey
The author has had the privilege of visiting the Fil-Tek factory, which spans an area of approximately 8,000 square metres. This factory specialises in OEM production of various parts and accessories for RO (reverse osmosis) pure water machines and has also invested in pure water machine assembly.
The Turkish company Fil-Tek primarily operates a one-stop production model, covering everything from the production of metal RO pressure tanks, pressurisation motors, film processing, and other key components, to the production of filter elements and filter bottles. Fil-Tek has been striving to reduce costs. The person in charge mentioned that there was only one R&D engineer in the entire company, and it was evident to the author that their management expenses were quite low.
Statistics from the Bureau of International Trade on the export of water purification equipment to Turkey over the past five years indicate a decline from 2,200,000 US dollars in 2017 to less than 100,000 in 2021, a drop of 95.5%.
Vietnam
Vietnam is another country with an endless market for RO water purifiers and water purifiers. AO Smith, Midea, and South Korea’s Coway have all been in the Vietnamese market for a long time. These Vietnamese manufacturers used to have dual identities in that they were importers of pure water machines and manufacturers of home appliances, water tanks, etc. They imported complete machine systems from mainland China and Taiwan, then gradually moved into their own assembly mode, importing key components from Taiwan. It is worth mentioning at this time that the factories of the parent companies of these manufacturers are not small and have allowed them to penetrate step by step into the field of RO pure water machines, which is worthy of reference.
In recent years, price competition within the RO membrane market has been fierce, and the reduction in price has been quite large. One day, if RO membranes with large flow rates are also reduced to prices as low as ordinary household membranes, Taiwan and mainland RO pressurised water storage tank manufacturers will suffer greatly.
For more information on the water purification market in Vietnam, please see: [Vietnam] Water Purification Market News.
Statistics on the export of water purification equipment to Vietnam in the past five years by the Bureau of International Trade show that the situation is going a similar way, from bad to worse: going from 5,500,000 US dollars in 2017 to 1,130,000 in 2021, a fall of almost 80%.
India
In addition to establishing a factory in Singapore, the American KX Corporation is also optimistic about India becoming a potential market. Therefore, to get closer to this market and obtain raw materials for activated carbon, it has set up a production plant in India to produce large quantities of compressed columnar activated carbon filter elements.
As can be observed, the water purification equipment industry is set to grow in more and more countries in the future. The reasons for this are, firstly, the technical barrier to entry is not high. Secondly, this industry does not require a substantial amount of investment. Thirdly, market demand is increasing. These attractive conditions will undoubtedly encourage greater investment from emerging countries.
In the past five years, Taiwan’s water purification equipment exports to India have fluctuated between 300,000 and 500,000 US dollars, which means that, although the export amount is not large, it is stable.
Russia
There are several prominent companies in Russia that, upon their establishment, also adopted advanced imported products to sell locally. Twenty years ago, they imported from Taiwan. Later, due to cost considerations, orders were transferred to mainland China. Eventually, they began to involve themselves in their own design, production, and assembly.
According to the export statistics from the Bureau of International Trade, the total value of water purification equipment exported to Russia from Taiwan over the past five years has been quite substantial, with exports amounting to $1,900,000 million in 2021.
Listed below are two large Russian companies we have selected to introduce to you:
Founded in 1993, with about 300 employees, BWT is a manufacturer of household filtered drinking water. Its main products include filter jugs, under-counter water purifiers, and filter elements. The company later formed a strategic alliance with BWT Group, and changed its name to “BWT BARRIER RUS”. The company’s annual revenue is about 26,000,000 US dollars, and it has its own laboratory, logistics system, and warehouse. Factory compliance: ISO9001 Laboratory passed: ISO 17025
(2)Aquaphor
Founded in 1992, Aquaphor’s main products include RO machines, water purifiers (for household, commercial, and industrial use), deionisation systems, and filter elements. These products are utilised in the food and beverage industry, cosmetics, hospitals, testing laboratories, manufacturing, and farms.
Their global distribution network encompasses 27 distribution websites in countries such as China, Germany, the United Kingdom, and France, with their products being sold in 44 countries.
Their raw material suppliers include BASF, John Geist, Mitsubishi, Puraite, and others.
Aquaphor has its own production and R&D teams in the United States, Russia, and Estonia, ensuring that product design, production, and manufacturing are handled in-house. The company holds 130 global patents and complies with TUV, NSF, and other standards.
Establishment dates for each group:
1990: Electrophor Inc. (NY, USA)
1992: Aquaphor (Russia)
2005: Winter Engineering/Aquaphor Professional (Israel)
2006: Zibo Aquaphor (China)
2007: Westaqua-Invest (Estonia)
2013: Aquaphor Poland (Poland)
2016: Aqua Biosan (Romania)
Major Clients: Apple, Intel, Nestlé, RD Energy, Iskar, Israel (30 largest hospitals; comprehensive hospital water purification and dialysis system; resuscitation department), Rosneft, Gazprom, KFC, Siemens FM Logistic, KAMAZ, ORIMI Trade Ltd.To view water quality conditions in various parts of Russia, you can see: [Russian Water Quality Conditions]
(1) Amii Sp.o.o.
The company was founded in 1977 and is headquartered in Warsaw (Lodz), Poland.
Its main products are RO machines, water purifiers (kitchen, home, and bathroom), filters, accessories, etc.
The company’s products are exported to 46 countries around the world, including Romania, Germany, Finland, Portugal, and Malaysia, with about 15,000 end customers.
The company has its own laboratory, and its products are certified by: TUV, Low Carbon footprint, BPA free, Porduke Polski,
Brand: blue filter,Fit Aqua, Fit Alco, Fit Narko
The company also operates its own online shop, and the retail channel brand is called “FITAQUA”.
Aquafilter Europe Ltd. is a British manufacturer specialising in water filters and water treatment components, boasting its own warehouse and logistics system.
Established in Warsaw in 1988, the company relocated its factory from the Far East to Poland in 2011. Subsequently, in 2014, a production line was set up in Germany. By 2017, automated production was implemented, with the production line extending to Belarus.
Aquafilter Europe Ltd. offers a range of products including shell, RO, water purifier, and filter elements such as microfiltration, ultrafiltration, and nanofiltration, alongside various accessories.
1.Commodity liability insurance of £2,000,000 purchased.
2.Own testing laboratory.
3.High-bay modern warehouse.
4.Product fields include household, commercial, industrial, and medical sectors.
5.Certification: ISO 9001, NSF, PZH.
My personal business experience tells me that Taiwanese OEMs should respond to these aggressive competitors by:
1.Development of new materials
Focus on innovative filter materials, which is an opportunity that SMEs can also choose.
2.Increase investment in automated production equipment
This can, firstly, reduce reliance on manual assembly and avoid the problem of labour shortages in Taiwan. Secondly, it can stabilise the quality.
3.One-stop production method
The assembly process for drinking fountains, pure water dispensers, and water purifiers is tedious, and processes such as assembly, testing, gluing, and lubricating with oil are all required in the manufacturing process. The disassembly and subsequent assembly of items in sections is time-consuming and takes up space. Adopting the one-stop production method can not only increase production efficiency but can also enable the detection of abnormalities in the process, which can be eliminated immediately.
4.Utilise Michael Porter’s competitive strategy
“Centralisation, differentiation, and low cost” should be carried out. If centralisation or differentiation cannot be achieved, focus on low-cost production.
5.Earn management money
Regardless of whether the economy is good or bad, the only constant rule for operating in the manufacturing industry is to “earn management money.” High-profit high-tech industries will one day become traditional industries, and the entry of new competitors will also turn high-tech industries into extremely competitive red ocean markets.
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