Enter the headquarters of Fulgent Sun International in Douliu, Yunlin – one of the world's leading contract manufacturers of outdoor footwear and apparel. Chairman Lin Wen-chih (林文智) has several thick binders filled with blueprints for new factories. Once, the world map on his wall showed manufacturing sites only in China, Vietnam, and Cambodia. Now, there's a fresh pin in West Java, Indonesia.

Keeping pace with publicly traded shoe giants like Pou Chen Group and Feng Tay Group, Fulgent Sun unveiled their ambitious expansion plans for 2023. They've acquired land and construction is underway, with production slated to begin next year.

“There are at least fifteen Taiwanese companies setting up new factories in Central Jawa!" Lin notes.

But the Indonesian facility is just one piece of Fulgent Sun's grand strategy. The company is fully committing to automation. Millions have been invested in automated shoe machinery and robotic arms, and they're also partnering with renowned universities like Feng Chia University and Yunlin University of Science and Technology to integrate cutting-edge technology.

(Source: Pei-Yin Hsieh)

Over the past five years, Fulgent Sun has funneled NT$7.2 billion into these advancements—four times its capital stock. For every hundred dollars earned, fifty go back into investments.

As the saying goes, it takes money to make money. Since 2018, Fulgent Sun's revenue has spiked by 40%, with profits more than doubling. Their decisive push into automation and enhanced manufacturing efficiency has been the linchpin.

Foreign partners often jest that while Lin's wife, CEO Judy Liao (廖芳祝), brings in the revenue, he’s the one who spends it.

"I've championed automation for nearly a decade. I personally phased out most of the first-generation machines," Lin reveals. His confidence is unwavering, "I invest in innovations others shy away from, knowing I'll see a return the very next year."

Despite the challenging climate in the shoe industry this year – with delayed client payments and dwindling orders – Liao observes that while their global customer base typically sees some ebb and flow, this year stands out for its universal slump. "Some orders are so negligible, they're virtually non-existent," she remarks.

Fulgent Sun's Q2 profit margin this year stood at 19%, reflecting a 20% dip.

Yet, Lin remains optimistic, firmly believing in the irreversible trend towards outdoor sports and that investing in automation is the future.

Why the emphasis on automation? It’s simple. Fulgent Sun caters to niche outdoor footwear brands known for durable products. Their prestigious client list boasts of brands like Vans, The North Face, VF Corporation's Timberland, Merrell, Northwave, and the innovative Swiss brand On Running.

Precision Management: The Pathway to Profits

Diligent market research is a cornerstone of their strategy. "Our success stems from identifying clients with the highest potential in their sectors," Liao explains.

For example, before On Running became a client, this emerging brand had already garnered numerous accolades at international outdoor apparel expos. Recognizing an opportunity with a former associate now at On Running, Liao was eager to collaborate.

Fulgent Sun's manufacturing model is dynamic, often producing just a few hundred pairs of a particular shoe model. With potentially 5,000 new designs annually, part numbers reach staggering figures. But for Fulgent Sun, automation facilitates meticulous management.

Liao highlights that contract manufacturers thrive through rigorous management. Minimizing errors maximizes profit margins. Their export price per pair is tenfold that of competitors. With a unique real-time manufacturing approach, as soon as an order drops, computers auto-source the necessary materials, reducing downtime significantly.

The intricacy of handling enormous part numbers is simplified through sophisticated computer algorithms, eliminating human error.

Lin recalls their long-standing relationship with shoe machinery suppliers. He gives an example: if one machine can accomplish three distinct manufacturing steps, it slashes the workforce from ten operators to three. This trims training time, and streamlines production expansion.

Automation has fortified Fulgent Sun's position, making them less susceptible to competitors poaching their orders or workforce. On numerous occasions, clients who ventured elsewhere have come back, realizing the unparalleled quality of Fulgent Sun.

"We craft shoes that stand out," Lin says, highlighting their dedicated R&D setups in Europe. He shares an anecdote of a rival who, despite recruiting three senior managers from Fulgent Sun, couldn't match their shoe quality. With a grin, Lin recalls, "It's not that simple."

Three decades ago, a Nike representative mused about condensing a shoe's production process from 543 steps to just ten. It seemed far-fetched then. Now, Lin believes that with automation, the sky's the limit. "Anything is achievable."

(Source: Pei-Yin Hsieh)

Have you read?

• The world of athletic footwear: ‘Made by Taiwan’
• The ‘hidden champion’ behind Nike and Adidas sneakers
• Lifting the Veil on Top Nike Supplier, Feng Tay

Translated by Jack Chou
Uploaded by Ian Huang