The "TSMC" of the Taiwanese orchid industry
Hsu Neng-Shun works to strengthen Taiwan's reputation as the " Orchid Kingdom"
By Chang Wei-Shan
Taiwan has been described as the "Orchid Kingdom"; Taiwan leads the world in the cultivation of Butterfly Orchid seedlings, and its growers are able to bring seedlings to maturity faster than those of any other country in the world. Currently, Taiwan ’s annual Butterfly Orchid exports total around NT$2.3 – 3 billion. Hsu Neng-Shun, CEO of Taiwan Orchid Professionals Co., Ltd., has developed a new value chain blueprint for the orchid industry, aiming to raise the industry’s annual production value at least 10-fold within three years, and to turn Taiwan Orchid Professionals into the "TSMC" (one of Taiwan's, and the world's, leading IC foundry service providers) of the Taiwanese orchid industry. Taiwan Orchid Professionals is scheduled to achieve OTC listing by the end of 2010, making it Taiwan's first publicly traded agricultural sector stock.
At the Chelsea Flower Show in the U.K. in May this year, the new Taiwan orchid variety Phal. Fortune Salzman was praised by Queen Elizabeth II . However, most agricultural producers in Taiwan export their products independently, making it difficult for them to secure really large orders from overseas. The current situation is that trading companies in other countries import seedlings from Taiwanese orchid growers at around US$7 per seedling; once the plants have grown to maturity, they are then re-sold for retail prices of up to US$39.9, so that most of the profits go to foreign vendors that know how to make effective use of branding. Despite all the hard work they have put into improving their orchid varieties and technology, the Taiwanese orchid farmers make only slim profits. Hsu Neng-Shun believes that the main problem is Taiwan ’s lack of strong brands.
Taiwan Orchid Professionals has built approximately 118,800 square meters of greenhouses in the Taiwan Orchid Plantation (TOP) which it rents out to orchid farmers. Taiwan Orchid Professionals purchases seedlings from the farmers at different growth stages (small, medium and large seedlings), and provides farmers with a guarantee that it will purchase the seedlings they are preparing to cultivate, thereby overcoming the challenges posed by long cultivation times and the resulting cash-flow problems, which have plagued the industry in the past. This new strategy will boost annual production volume by around 500,000 plants. The greenhouses at TOP also make effective use of information and communications technology (ICT), to achieve precise control over the seedling cultivation environment, and ensure stability in terms of both output and quality. In March 2010, Taiwan Orchid Professionals signed an MOU with the Malaysian government to collaborate on the establishment of a 20-acre "International Muslim Orchid Exploration World" in East Malaysia .
Promoting high-quality lifestyles
Tseng Chung-Hsin takes his Villa concept international
By Hu Hsiu-Chu
From the Yoho Landis Beach Club Hotel in Kenting, to Taiwan's first "children's hotel", to the first hotel in Southeast Asia to be specifically designed for cyclists, to the Mudanwan Hot Spring Villa (the most exclusive hot springs hotel in Taiwan), Yoho Landis Chairman Tseng Chung-Hsin has become an expert at "slicing up" the market and developing every individual market segment as thoroughly as possible.
To ensure that quality standards are maintained, the Mudanwan Hot Spring Villa has adopted an operational strategy that seems to go against basic market principles. The Villa does not allow casual visitors, and all guests are required to book their rooms in advance. What is more, the Villa maintains the same price every day of the year, with no special discounts at particular times of year. "Since we opened, we have turned away about 100 would-be guests who hadn't booked in advance" says Tseng. Tseng is determined that guests who have booked their room in advance should not find themselves in a situation where they can't get the food they want (because of a sudden, unanticipated influx of guests), or the food is not fresh.
Tseng Chung-Hsin has been seeking to identify sources of competitive advantage that can help Taiwan's leisure and tourism sector to be internationally competitive in the future. As Tseng sees it, "Taiwan's main strength lies in its lifestyle-related industries." He believes that Taiwan's single biggest source of competitive advantage is the warmth and friendliness of its people, and that this is an area where Hong Kong , Singapore and China cannot compete effectively with Taiwan . Besides this human "software" strength, Taiwan is also strong in "hardware," with impressive information and communications technology (ICT) infrastructure that makes life very convenient for holidaymakers. For example, in the special "children's hotel" facility in the Yoho Landis Beach Club Hotel, an RFID system has been installed instead of conventional barcodes and access cards. Wearing an RFID bracelet, the young guests don't need to "open" the doors in the conventional way; they just swipe the bracelet over a sensor, and the door opens automatically. In the restaurant, too, they just swipe their RFID bracelet, and the food that they are ordering is automatically recorded by the computer system.
Air-conditioned rice!
Fuli Rice, which has been awarded certification by the European Union, is now being exported all over the world
By Hu Hsiu-Chu
Not only is Fuli Rice (produced in Fuli Rural Township, Hualien County) the favorite brand of Taiwanese rice among Japan’s very demanding consumers, even more impressively, after three years of effort Fuli Rice has succeeded in securing certification from the European Union; Fuli Rice may be on sale in Germany, Switzerland and other European countries as early as the end of this year.
“Our rice is air-conditioned 24 hours a day; it actually stays cooler than people do,” explains Chen Jung-Tsung, Director of the Fuli Farmers Association. Some while ago, a shipment of Fuli Rice being exported to the U.S. was kept onboard ship for several months. By the time the rice reached the supermarkets in the U.S., insect larvae hidden among the rice grains had hatched, and the white rice had been so gnawed by insects as to make it inedible; the whole shipment was rejected, which had a serious impact on the brand image of Fuli Rice. Following experts’ recommendations, the Fuli Farmers Association began using low-temperature cold storage to kill the insect larvae and maintain product quality. Pointing to a two-storey refrigerated warehouse, Chen says: “The air conditioning is on in there 24 hours a day, because you have to keep the temperature below 25 ° C to kill the insect larvae.” After the rice has been harvested and husked, it is placed in cold storage at a temperature of 9 – 16 ° C, to prevent germination due to excessively high humidity. “The electricity bill alone costs us NT$ 150,000 a month.”
The Huatung Rift Valley area in Eastern Taiwan produces over 15,000 tons of rice a year, most of it high-quality rice. The Fuli Farmers Association grows the Kaohsiung #139 rice strain on the just over 40 hectares of rice fields in Fuli. Every aspect of rice cultivation is carefully planned and rigorously controlled, from the selection of varieties through the tilling of the soil, transplantation of the seedlings, weeding, application of fertilizer, through to harvesting. Cutting-edge technology is used to implement regular monitoring of how the rice is doing, ensuring full product traceability; every bag of organic rice that the Fuli Farmers Association exports has its own “ID card,” recording when fertilizer was applied and in what quantities.
An e-pedigree for Grouper fish
Wu Chih-Mou works to develop export sales with his “Live Fish Center” brand
By Chang Wei-Shan
Wu Chih-Mou, CEO of Tekho Company Ltd., has succeeded in applying modern business methods to Taiwan’s traditional aquaculture industry. Wu has used Radio Frequency Identification (RFID) technology to establish “e-pedigree” product traceability for live fish production, and has made the ability to supply safe, healthy food products the core feature of his “Live Fish Center” brand. In 2008, Tekho won the Department of Industrial Technology (Ministry of Economic Affairs) Industrial Innovation Award, and last year the company was honored again in the first annual Hi-tech Agricultural Enterprise Awards.
Consumers have gradually become more aware of the importance of food safety. Farmers and fish-farmers are being forced to bear the increased costs of introducing product traceability systems to enhance quality standards, but there has been no corresponding rise in the price that distributors pay to the producers. Boosting product value-added through branding is the only way to stimulate farmers’ and fish-farmers’ enthusiasm for implementing product traceability systems. This is precisely the strategy that Tekho has adopted for its “Live Fish Center” brand. Every fish has its own unique RFID tag which records every aspect of its life, enhancing both consumers’ confidence in the safety and quality of the product, and their loyalty to the brand.
Today, Tekho has 150 hectares of “ubiquitous networked” aquaculture tanks in Cigu Township, Tainan County, all of which conform to environmental protection and organic food product standards. Using RFID control tools, all production information is made public and transparent, which is one of the main factors behind the success of the Live Fish Center production team.
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