“To do a good job, a workman needs good tools.” Provincial Highway 74, an expressway that loops around downtown Taichung in a broad horseshoe, passes close to many of Taiwan’s hand-tool factories, creating the advantage of an industrial cluster.

The practice of “do-it-yourself” (DIY) is widespread in Europe and North America, and Taiwan’s hand-tool products are mainly exported. Statistics from the Industrial Development Bureau (IDB) of the Ministry of Economic Affairs indicate that there are about 2,400 hand-tool-related businesses in Taiwan, with nearly 50,000 staff, carrying out the entire manufacturing process from die ­making to heat treatment, forging, electro­plating, and assembly. They form a complete supply chain, while China Steel Corporation provides steel raw materials of reliable quality. The industry has an annual output value of over NT$130 billion (US$4.2 billion).

At present, more than half of the hand tools supplied by major international brands are manufactured in Taiwan. For example, Proxene Tools Company specializes in making adjustable wrenches, and Cosda Manufacturing Company makes specialized tools for auto repair and maintenance. Their products are sold into more than 50 countries, raising the global visibility of “Made in Taiwan” goods.

Proxene: A global market leader

Proxene’s expertise lies in manufacturing adjustable wrenches, known as “the king of hand tools.” They make everything from wrenches for home DIY and specialized products for use by plumbers and auto mechanics, to industrial-grade products for construction, mining, and even airplane maintenance and the ship industry. Almost one out of every four professionals uses Proxene products, and their industrial-­grade adjustable wrenches have a global market share of over 20%.

We arrive at Proxene’s new factory, which this year opened its second automated production line. The place is busy, with forklifts shuttling around delivering materials and stacking finished products. Arthur Wu, Proxene’s founder and president, says that the reason he got into manufacturing adjustable wrenches was that he “wanted to take on the challenge of operating in a field that in the past was not a big money-earner.”

The shape of an adjustable wrench is a combination of disparate geometric forms. These include the rod that carries the movable jaw and the corresponding hole that runs through the handle, which have to match perfectly in terms of angle and manufacturing precision on every wrench. “It’s not difficult to make one, but if you want to make hundreds, or thousands, then the parts need to be completely interchangeable, and that’s difficult,” explains Wu, highlighting the challenges he faced when getting into tool manufacturing 40 years ago.

Focusing on R&D, Wu led his team in designing a series of adjustable wrenches ranging from four to 24 inches in length. In 1998 the FP series, designed to conform to ergonomic principles, won the company its first Taiwan Excellence Award. Thereafter Proxene developed a number of ratcheting adjustable wrenches and won numerous other awards, including the Red Dot Design Award and the iF Design Award (both from Germany), and the Golden Pin Design Award (from Taiwan). Selling its products in 52 countries, the firm has successfully made the transition from OEM to ODM manufacturing. “There is very likely a Proxene product in the pockets of countless plumbers.” The company’s digital adjustable wrench is today generally recognized as the world’s highest-precision adjustable wrench.
 

From startup to stock listing

Wu says that in all industries, no matter how important, both manufacturing and repair work require the use of hand tools. However, early on the hand tool industry was extremely traditional in its outlook. After Wu was elected chairman of the Taiwan Hand Tool Manufacturers’ Association in 2013, he advocated for innovation and for the restructuring and upgrading of enterprises. After he left that post, with government guidance Proxene introduced smart production tech­nology and standardized its workpieces, and even installed industrial robots. These steps stabilized product precision, and in-house production reached 90%.

Over the last 40 years, Wu’s operating philosophy of “precision, innovation, and high value” has helped transform Proxene into one of the top three industrial-­grade adjustable wrench manufacturers in the world. The company has been granted nearly 300 patents, and their clients include three of the leading US hand-tool brands: Stanley Black & Decker, Snap-on, and Milwaukee.

Before the Covid-19 pandemic, under an IDS program to upgrade the plumbing hardware and hand-tool industries, Proxene received subsidies to build smart automated production lines, and this ensured that the company’s production capacity was not affected by the pandemic. In August of 2022 the company was approved for listing on the Emerging Stock Board of the Taipei Exchange, becoming one of the first five hand-tool companies in Taiwan to be listed on the Taipei Exchange or the Taiwan Stock Exchange.

From its early days of being strapped for cash to being a listed company with a market value of NT$2.3 billion (US$74 million), Proxene and Arthur Wu have raised Taiwan’s global visibility and turned everyday hand tools into precision products.

Cosda’s distinctive marketing model

Cosda Manufacturing Company, founded in 1978, also forms part of Taichung’s hand-tool industrial cluster. It is Taiwan’s leading specialized maker of workshop hand tools for automobile repair and maintenance. Over 95% of its high-end products, including damper spring extractors, radiator leak testers, and brake fluid exchange machines, are exported.

After the second generation took over management of the company, they began to emphasize online marketing and business-to-business (B2B) e-commerce. They grew the company from a small operation into a powerhouse SME with capitalization of NT$60 million (US$1.9 million) and 65 employees that produces over 260 products and holds 56 patents, and whose annual revenues have reached new highs year by year. Among their clients are such firms as German carmaker BMW, US electric vehicle manufacturer Tesla, and tool companies including Snap-on and Stanley Black & Decker.

Vice-president Nina Liu explains their operating model, which is virtually unique among traditional industries: “We don’t exhibit at trade fairs, but instead invest the money we save into online marketing.”

Looking back, it is 45 years since Cosda was founded by Nina Liu’s father, Liu Lai-cheng. In 2001 they began concentrating on automotive repair tools, and thanks to the elder Liu’s solid grounding in mechanical engineering and his technical drawing skills, the universal auto cooling system leakage tester that he developed even received an invention patent in Taiwan. In the short space of five years, the company upgraded from OEM to ODM manufacturing.

In 2020 Cosda adopted search engine optimization and joined a B2B e-commerce platform, and the international reach of their client list quickly expanded, growing from 20 countries to 68. They became “Mittelstand” enterprise specializing in automotive tools.
 

Selling products, selling systems

“We don’t just sell products, in fact we sell systems,” says Nina Liu, sharing the key element in ­Cosda’s success in the auto tool market. She points to oil changes as an example. Cosda developed an oil drain plug removal tool that innovatively incorporates a heat-­resistant magnet that holds onto the plug as it is loosened, saving people from touching the hot oil with their hands. This product is especially popular among mechanics in Japan. Another problem with vehicles’ oil drain plugs is that over time the screw threads of the drain hole, which the plug screws into, can become damaged or stripped, leading to oil leaks. To address this issue, Cosda designed a series of thread taps, replacement plugs, and copper washers, which are used to renew the screw threads, solving the problem of loosening and leaks. These items have been combined into kits: “This is what we mean by systems.”

Innovation and R&D are the critical factors enabling enterprises to become market leaders. Cosda worked with chemical and rubber companies to develop an elastic core material that will not harden over time, in order to make a mallet that will not damage car bodywork when used to install seals and trims. In fact, if these mallets are used to strike eggs, they won’t even break the shells. Nina Liu says proudly: “Cross-­disciplinary designs are hard to imitate.” This elastic-­filled mallet has now been patented and is being exported to European and American markets.

“We always aim to do something different,” says Liu. Although Cosda is a small company, whenever they launch new products they are quickly copied, which shows the leading role they have in their industry. She has created an elite team that believes that “there is no best, only better.”

In recent years Taiwan’s hand tools have been making the transition to becoming high-grade industrial products. “What we hope to do is make tools that are easy to use, that save time and effort, and that people love so much they don’t want to put them down, and that after use they wipe them clean, hang them on the wall and admire them,” says Arthur Wu, who is currently honorary chairman of the Taiwan Hand Tool Manufacturers’ Association.

Taiwan’s hand-tool makers have made it their common goal to pursue excellence as the way to make their everyday products stand out from the crowd. This ambition has become a trend for the “Made in Taiwan” brand.

For more pictures, please click 《Taking Everyday Products to a New Level—Taiwan’s Hand Tool Industry》