Located in central Taiwan, Kunnan turns out 9,500 rackets a day, 3,000 more than Donnay of Belgium, the world's No.2 supplier.
The sporting goods dealers that assure Kunnan's success appreciate its insistence on quality. Kunnan makes boron fiber and aluminum as well as wooden rackets. A boron top-of-the-line racket sells for NT$8,900 (US$225).
There are some 90 steps involved in making a quality wooden racket. After it is fine-tuned by veteran craftsmen, it is carefully examined for defects.
One craftsman, Chen Chi-tung, says four of ten aluminum rackets are rejected in Kunnan's quality control process. When Chen examines a racket, his concentration is such, he says, that he does not know what is going on around him.
Many foreigners regard the Republic of China's economic progress as a miracle. If so, Kunnan's success is a miracle within the miracle. Established just 14 years ago, Kunnan is maintaining an annual growth rate of 40 percent despite the worldwide recession.
Much of the credit for Kunnan's success goes to its president, Lo Kunnan, a young man with plenty of gumption.
The 38-year-old crew-cut executive travels abroad five months out of the year. He attends tournaments all over the world to meet the players and discuss their needs and racket preferences. As a result, Kunnan products are constantly being improved. Lo Kunnan's formal education was limited to junior high school, but his English is fluent as a result of frequent contacts with English-speaking customers.
(File photo)
Kunnan regards himself as a technical pioneer. He says a man cannot create a big business if he thinks small. "A frog at the bottom of a well can never see the wide sky," he says.
Kunnan doesn't cut prices. It charges the most because it makes the best. "My product is tailored to the specific needs of specific customers," Kunnan says.
Fourteen years ago, Lo Kunnan opened a small factory employing 20 workers to make badminton rackets. Three years later, the plant moved to a new building; orders were arriving like raindrops in a Taiwan thundershower. Within a few years there were five buildings and 1,400 workers. Daily production of 9,500 rackets is still insufficient to meet the demand.
Five years ago, Kunnan created its own brand, Kennex. Some opposed this step, arguing that the plant had prospered by producing for other suppliers. But Lo Kunnan was farsighted. He was sure he could carve out a substantial share of the world market for his own brand.
Lo is usually quiet. But when people mention Kennex, he becomes animated. His eyes become soft; he talks like a mother recounting the exploits of her son.
He does not favor a policy of making rackets under other brand names. "In the long run, a businessman should cope with market changes by controlling his own staff and product," he says. "It is not good policy to make goods for other suppliers indefinitely."
Five years ago, he stamped "Made in Taiwan" on products bearing other's trademarks. He asked overseas Chinese to boost his products at exhibitions in the United States. Sales were not good. He found that many American buyers had no confidence in Taiwan-made products. They considered them cheap and of poor workmanship.
Lo Kunnan decided to reshape his sales strategy. He sold the Kennex export company to an American businessman proficient in marketing and advertising. American blondes began to promote the sale of Taiwan-made rackets.
Kunnan Enterprises Limited spent US$7.8 million last year in a program to induce outstanding world players to wear Kennex T-shirts. The company benefits from the identification of these players with its equipment. "Many suppliers of sporting goods adopted this tactic long ago," Lo said.
Inspection - Moment of truth for anyone's racket. (File photo)
Although "Made in Taiwan" was subdued for the time being, Lo believes quality will inevitably establish world markets for Taiwan cars, motorcycles and pianos as well as tennis rackets. "Made in Taiwan" will be featured again for Kennex rackets in time.
The rapid growth of Kunnan has deprived the plant of the opportunity for carefully planned development. Locations of the buildings are not rational. They are so crowded with workers and materials that people have difficulty moving around. Even the office has become a warren. Some people have joked that Lo wears his hair short so he can more easily comb out the wood chips and dust falling on his head.
The management system has not kept abreast of expansion. Coordination is not all it should be.
Peng Chung-ling, head of the planning department, says Lo Kunnan is a workaholic and skips meals when he is busy. There is no denying that he is the boss and that delegation of authority is difficult. One explanation is that Lo finds it difficult to recruit competent people.
The management actively promotes new methods to strengthen quality control-included was the installation of a closed-circuit television monitoring system. The TV eyes were removed when workers complained. Kunnan concedes that management also needs improvement and says he will spend more time at home now and less abroad.
Lo is prepared to pay well for good management. "I will never be stingy in recruiting talented people," he says.
Lo acknowledges that Kunnan Enterprise cannot be regarded as a model modern business firm. At the same time, none of the department chiefs is a relative or friend. He does not want "relationship" interference in carrying out his policies.
Though Lo Kunnan has won many government citations for the company's export performance, he refuses to pick them up in person. "I won't attend such a ceremony until we have become one of the Big Ten exporters - probably in four or five years." In 1981, Kunnan's export volume ranked 80th in the country.
So Lo Kunnan doesn't regard his business as a success. And, though he can make a Prince racket, the world's best, he is determined the Kennex racket will equal it. He has made this the company motto:
"Set our sights high, widen our ambitions and work harder to make Kunnan Enterprise the world's leading manufacturer of sporting goods."