Over the three decades or so that Chen Wei-lung (陳維隆) has worked for Shing Long Towel Industrial Co. (SL Towel) in southern Taiwan’s Yunlin County, the 64-year-old mechanic has witnessed the rise, fall and rise again of the remarkable enterprise. “Business drastically declined right after the government gave the green light for imports from mainland China, so around that time I was afraid I’d lose my job,” he says. “But our company turned that crisis into an opportunity by transforming itself into a tourist attraction, and has grown stronger year by year since.”
The dark days of the early 2000s are a distant memory for the employees of SL Towel. Whereas once they would arrive at work to see a near-deserted car park, nowadays they get to the factory to find lines of coaches filled with visitors. While many companies in the local towel manufacturing industry are struggling to stay afloat, SL Towel has never been busier. “My boss keeps asking me to continue working, even though I think I’m at an age when I should probably retire,” Chen says.
The secret behind the company’s resurgence, and the growth in popularity of Shing Long Towel Tourism Factory, is its innovative product design. When low-cost competition pushed the business to the brink of collapse, SL Towel’s owner Lin Kuo-lung (林國隆) began introducing creative items with higher profit margins. Since releasing a line of cake-shaped hand towels in the mid-2000s, the company has gained legions of fans due to its curious and delightful products. Today, visitors to the factory’s gift shop can peruse a vast array of hand towels resembling all manner of animals, human figures and treats.
According to Lin, Shing Long Towel Tourism Factory now attracts 250,000 visitors a year. The plant is located in Yunlin’s Huwei Township, which has long been the center of the nation’s towel production sector. “During the 1980s and 1990s, there were more than 200 towel factories—mostly family-run businesses—in Huwei,” says the entrepreneur, who started SL Towel with his wife in 1979. “Our plant used to run three shifts a day and our products were exported to the United States. That was the heyday of the industry.”
Taiwan’s accession to the World Trade Organization in 2002 and the resulting implementation of market-opening measures dealt a heavy blow to the local towel manufacturing sector as low-priced imports from mainland China began flooding the domestic marketplace. “Products made by mainland Chinese companies were at least 30 percent cheaper than ours,” says SL Towel’s owner. “We couldn’t possibly compete, and many factories in Huwei closed their doors.”
As the situation worsened, Lin called on manufacturers to band together in an attempt to improve the environment for local towel producers, and in 2005 they established the Yunlin Towel Industrial Technology Development Association. The group organized a series of petitions and protests against the cheap imports. In 2006, after investigating their concerns, the government imposed an anti-dumping duty of up to 204.1 percent on mainland Chinese towels for a period of five years. The levy was extended for a further five years in 2011.
“Thanks to the anti-dumping tax, we gained time to re-engineer our business practices,” Lin says. “Many of us purchased advanced manufacturing equipment to increase production efficiency and upgrade the quality of our products as we knew that we needed to improve our competitiveness to survive.” At present, there are about 50 towel factories operating in Yunlin.
Lin also recognized that his company needed to develop fresh revenue streams. Indeed, he had already begun introducing creative new products prior to the imposition of the anti-dumping duty. The idea for cake-shaped hand towels was given to him one day by his children as they discussed the family business around the dinner table. Though initially unconvinced, Lin decided he should listen to the younger generation of his family, and the first batch of dessert-shaped towels went on sale in 2005.
“To my surprise, the cake towels were an immediate success and raised our profit margins substantially due to their much higher price tags,” he says. “That motivated us to place greater emphasis on the design of our goods and expand our product lines. Today, we offer more than 500 items, many of which are both practical and decorative.”
Spurred by the success of the hand towels, Lin sought out other methods to expand his business. In 2008, he learned of a Ministry of Economic Affairs (MOEA) scheme to help traditional industries attract tourists, and decided to explore the possibility of transforming SL Towel’s manufacturing plant into a visitor attraction. With financial and technical assistance from the MOEA, Lin added new facilities including a gift shop and outdoor play and seating areas, as well as exhibits of various weaving machines used over the decades. Today, the factory also arranges do-it-yourself classes that show participants how to fold hand towels into the shapes of animals, human figures and sweets.
The tourism factory has boosted SL Towel’s brand name and revenue, Lin says. He further notes that sales have grown since many of the company’s products were granted the Made-in-Taiwan (MIT) Smile Logo by the MOEA’s Industrial Development Bureau. Additionally, in a bid to increase its market share, SL Towel has established five sales outlets in central and northern Taiwan.
Now 70 years old, Lin says he is gratified that his company has experienced a new lease on life. “Enterprises must adopt new ways of thinking and operating to respond to rapidly changing market conditions,” he says. To this end, Lin enlisted the help of his daughter, Lin Tzu-chun (林姿君), who is now part of the company’s management team.
Lin Tzu-chun, previously a professional dancer for Taiwan’s renowned Cloud Gate Dance Theatre, joined the enterprise in 2012. “My parents have managed to hang on all these years, so I feel obligated to share their workload and help keep the business going,” she says. “Plus, I see a number of commercial opportunities that we can explore.”
In addition to instituting standard operating procedures to improve efficiency in the factory, Lin Tzu-chun has worked closely with two designers to develop new products. These efforts have resulted in the company releasing a great many creative towels, including offerings in the shapes of hippos, pandas, nurses, police officers and folk deities. She has also helped attract new visitors by organizing a workout activity featuring towel exercises on weekends and major holidays.
Meanwhile, in its full-size towel range, the company has developed new lines made from organic cotton and functional fabrics with antibacterial, cooling and deodorizing effects. As a result of the company’s commitment to launching new products and organizing different activities, sales have more than doubled in the past three years, Lin Tzu-chun says.
The company’s efforts certainly seem to resonate with consumers. Visitors Jeff Liang (梁偉倫) and his girlfriend, from Taipei City, note that they added the tourism factory to their itinerary during a vacation to southern Taiwan in June this year specifically to purchase the firm’s products. “The quality of towels is very important as they come into direct contact with our skin,” Liang says. “The factory’s guided tour of its manufacturing facility boosts confidence in its goods.”
Sandy Lee (李佳芸), her husband and daughter also visited SL Towel in June while on a two-day trip to Yunlin. “The DIY class offered at the tourism factory is really great as it inspires children and helps develop their imaginations. My daughter had so much fun learning how to fold a towel into the shape of a rabbit,” she says.
A group of students from Chaoyang University of Technology (CYUT) in central Taiwan’s Taichung City were also among the visitors to the factory during the summer. The young people, who are all enrolled in the university’s College of Management, were drawn by academic curiosity over the company’s rebirth. “We’re preparing a report on experiential marketing and consider SL Towel a good subject for our case study,” explains 21-year-old CYUT student Tsai Pei-shan (蔡佩珊). “We’re impressed by the company’s efforts to diversify its products and services.”
Tsai says she and her classmates had an enjoyable experience learning about the history of the company, watching towels being made, and trying their hand at creating animal-shaped towels. Plus, they could not help but buy several items in the gift shop. “We’ll have a lot to write about,” she says.
The continued growth in sales and visitor numbers gives Lin Kuo-lung an enormous sense of achievement. “Back in the mid-2000s, my company was in serious debt and nearly shut down,” he says. “But thanks to government assistance and our own efforts, we’ve been able to weather the various difficulties and expand our business.”
The factory owner is now preparing to retire, safe in the knowledge that he has done all he can to help his enterprise and his hometown of Huwei. “What I’m most proud of in my life is that I took the initiative to fight for the survival of Taiwan’s towel industry and saved my own company at the same time,” he says. “You can make it through any crisis if you hang tough and pursue innovation—that’s the lesson I’ve learned over the years.”
Write to Kelly Her at kher@mofa.gov.tw