Copyright owned by Fastener World

Taiwanese Pioneer in "Net-Zero" Nuts

Hu Pao is an IATF16949-certified high-end manufacturer specializing in customized automotive nuts. They are also one of the first few fastener manufacturers in Taiwan to push forward ESG and carbon reduction measures. Vice president Bill Wang joined as a student in the founding year of Zero Carbon University in Taiwan. He also joined Zero Carbon Transition Alliance at Chang Jung Christian University in Taiwan, where he shares the tools and resources needed to achieve net zero and carbon inventory with managers and lecturers from various fields who see the same net zero goals.

In December 2022, the European Union announced the carbon border tax target will include fasteners, causing great concern to the fastener industry. Bill said many domestic business owners were still waiting and seeing, but never would they expect that EU would be that fast to reach this decision that will require Taiwanese fastener manufacturers who center on Europe to report carbon emissions. A survey shows there are still nearly 40% of small and medium-sized enterprises in Taiwan which have yet to do anything on net zero transformation, and now, the EU carbon reduction order is right at their doorsteps. "It doesn’t matter if we start early or late, but if we don’t take action, we won’t be able to make it in time," said Bill. Hu Pao has set up a carbon reduction task force and he precedes other industry players by setting "net zero transformation" as his latest business development guideline, aiming to pass ISO14064 (Organization’s Greenhouse Gas Inventory Standard) in the first half of 2023.

Investing In Carbon Reduction Resources for Sustainable Development

Hu Pao adopts an electrostatic oil and gas recycling system on site, using electrostatic plates to filter out oil and pollutants and purify the air. Bill is proud to be the first nut manufacturer in Taiwan to install a particulate matter (PM 2.5) monitoring system in his factory. When the air pollution level exceeds the warning value, the electrostatic plates are replaced immediately. "As an ESG advocate, we not only promote environment protection awareness, but also strive to create a pollution-free manufacturing environment that provides employees with a sense of safety and comfort,” said Bill. To achieve the ultimate goal of ESG, they have invested NTD 15 million to motivate their 3-in-1 (ISO 50001 for energy management, ISO 14064 for greenhouse gas, ISO 14067 for product carbon footprint inventory) strategy and in-plant air purification.

Integrating "IoT-enabled Machines" And "Monitoring" System

The 19 machines in the plant are respectively connected to four IoT systems. Through the local servers installed in the plant and AWS (Amazon cloud computing service), the machines' electricity consumption and output data are captured using digitalized electric meters to monitor electricity usage and utilization rate on the fly. For one thing, it can reduce the manpower required to handwrite the data and go paper-free. For another, it can monitor machine status in real time and understand the energy consumption and efficiency of equipment through software-driven statistics. This will enable the management to make immediate and effective decisions and handle both energy conservation and efficiency, fully utilizing resources to avoid wasting.

Hu Pao’s Net Zero Blueprint

Through a carbon inventory, Hu Pao found that land and sea transportation accounts for as much as 50% of their own carbon emissions, and electricity consumption accounts for 20%. Since the current high steel prices and logistics costs are beyond the control of ordinary enterprises, Bill believes what fastener companies can control is "product yield". "Suppose we purchase 1,000 tons of raw materials, if we can improve the yield rate and produce not only 800 tons but 850 tons of good products from these materials, we will successfully reduce carbon emission and production cost. This is something we can do on our own by optimizing our production line. He believes that if Hu Pao, a small company with only 43 employees, can achieve smart manufacturing, digitization and embark on a "net zero" journey, other fastener manufacturers have the potential to do the same, so don't give up so easily!

After starting carbon inventory, they have projected that they will peak at 20,000 tons of carbon emissions in 2026. They plan to reduce carbon by 60% in 2032, 80% in 2042, and achieve net zero in 2050. Bill plans to build a solar power plant for internal use in about 10 years and sell the generated electricity to Taipower to obtain a green power certificate. With experience, he understands small and medium-sized fastener business owners who want to achieve ESG and carbon reduction are in the bottleneck of having no one to ask and no place to start. Therefore, he suggests reading Challenges and Changes: Pioneers of Net Zero, a book gathering the talks of a group of experienced second-generation successors.

Bill, who led Hu Pao to successfully transform into an ESG-compliant company, was selected as one of the 100 most valuable managers (MVP) in Taiwan in 2022. We can’t wait to see what achievement can his organizational innovation bring to Hu Pao

Copyright owned by Fastener World   

Specialized in manufacturing customized automotive, special, and locking nuts, Hu Pao Industries Co., Ltd. is not the largest manufacturer in Taiwanese fastener industry though, but is one of the exemplary companies most active in optimizing its competitiveness on the int’l stage. In 2021 it moved to the 26,445 sqm new plant in Guiren Dist. with the total investment of NT$ 0.6 bn and simultaneously optimized various software/hardware/manufacturing procedures/systems and upgraded forming/tapping/optical sorting equipment. The bright, ventilated, non-sooty, tidy, and well-organized production lines as well as the installation of solar panels not only have completely solved the issue of limited space in the old plant restricting capacity expansion and are expected to increase the capacity by 50%, but also make it easier for Hu Pao to meet global customers’ demands and offer them service from the new plant. 
Upgraded Manufacturing Procedures
Innovative Renovation and Optimized Procedures
     Hu Pao has been implementing digitalization for years. In addition to ERP, MES, the installation of pressure sensors on formers, remote tapping machine monitoring, and new 3D graphics software, many other eye-catching optimization and upgrade have been also completed in 2021. For example, in order to enhance and stabilize the integral manufacturing quality, an intelligent energy control system has been also introduced into the new plant. On the one hand, stable voltage output can prevent equipment from being interfered; on the other hand, around 15% of energy can be saved, thus making early preparations for the upcoming EU’s Carbon Borders Adjustment Mechanism (CBAM).  
 
     Vice President Bill Wang said, “CBAM will come into force soon, so the energy control in manufacturing is quite important. So far, we’ve installed pressure sensors on formers, which are also synchronized with MES to collect electricity consumption data, and have an alert mechanism for parts repair & maintenance. Moreover, we also plan to introduce ISO 14000 and ISO 14067 (the Carbon Footprint of a Product) and expect to submit the application this year or next year.”
 
     Furthermore, for accelerating standardization and digitization, Wang added, “This has been the 3rd version of ERP we adopt, which shows clear info of our quotations, orders, material purchases, machine/die control, as well as product code tracking, delivery, batch inspection, and labeling, keeping customers promptly updated with their order statuses. In addition to regular annual upgrade of the data system, for creating a smart-factory environment, we also expect to introduce online task appointment, measuring systems, and monitoring center that can avoid the risk of manual data management, helping achieve a more efficient operating data standardization and procedures control.”  
 
Complete Development Capabilities
The Ability to Provide “Low-Volume Batch of Diverse Items”
 
     The IATF16949 certified Hu Pao receives around 80% of its orders for high value-added customized automotive nuts, which are required to be of very high quality. With over 3 decades of die development capabilities, it can almost produce every size from M5 to M20. And, different from other large manufacturers requiring min. quantities, Hu Pao even accepts orders for “one bundle of wire rod”. With the advantage of short lead time (one month), it can help customers reduce their inventory. Adopting materials from Taiwan CSC, Hu Pao also utilizes computer inspection, pressure/torque sensors, and power monitoring devices in manufacturing to ensure full compliance of every manufacturing procedure with standards. Sometimes when a few defective items are detected before shipment, the whole batch will be even returned for re-inspection to ensure no defective item is delivered to customers.
 
Active Introduction of External Resources
The Invisible Champion of Taiwanese Nut Manufacturing
Different from other 2nd generation in the fastener industry, Hu Pao, under the leadership of Vice President Wang, has been quite active in recent years in introducing external resources from inside and outside the industry, strengthening interaction with academies and governments, and learning from the experience of many successful companies in northern Taiwan to help Hu Pao improve and optimize in various perspectives. It is also one of the only 5 companies from Taiwanese fastener industry that have received the honor of Taiwan Mittelstand Award. 
 
     Wang noted, “Carbon neutrality, digitalization, and so on have been carried out by companies outside the fastener industry for so long, and the fastener industry has been left far behind. I, with non-technical background, have been active in interaction with companies in northern Taiwan and participated in activities of New Generation College in anticipation of introducing external resources to make Hu Pao grow stronger. I should be a very unconventional new generation! Facing the emerging trend of EV, Hu Pao still achieved an around 30% sales growth in 2021 from 2020. With the support of the new plant, Hu Pao will accelerate steps to create higher capacity and sales. In the future, we may also extend business reach to semiconductor, bike, or solar power and other precision industries. The reserved 4,958 sqm unused space of the new plant also offers possibilities for our future business expansion.”
 

HUPAO Industrial Co., Ltd. cooperates with GoodLinker Co., Ltd. to conduct real-time monitoring of energy and PM2.5 for molding machines, which is the first step in the sustainable development of ESG pursued by Rubao Xingye

https://www.youtube.com/watch?v=rO53Yqd4SWE

Chang Jung Christian University (CJCU) worked with President Lai-Chu Chen (TEN Life) to establish the “Net Zero Transformation Alliance”, which was activated on May 26. This resource platform will operate based on ideas of teamwork, cross-sector collaboration, and digital transformation to provide tools & resources, consulting & guidelines, IT system buildup, and many other service for helping Taiwanese companies achieve the required quantitative indices and data management in the process of achieving zero carbon emission, as well as complete “DigiZero” to reach the ultimate goal of net zero. The activity was given simultaneously onsite and online and the corporate partners of digital carbon footprints verification were also announced. On the same date, President Chien-Yung Ma (Solar Applied Materials Technology Corporation, SOLAR) was invited to give a thematic speech on “SOLAR’s Circular Economy and Plans for Future Net Zero Transformation,” for giving alliance members more inspirations through experience sharing.   

In a video call President Lai-Chu Chen said, “it’s my pleasure to witness the activation of the Alliance today. Climate change is not a future tense, but a present tense, which is why all of us gather together here. The key point of change lies in “people.” I’d like to express my special thanks to CJCU President Lee’s support and CJCU CRO Pei-Chih Wu’s effort and time for discussions, which boosted the establishment of the Alliance. At the same time, I’d also like to thank SOLAR President Ma for his participation. SOLAR is one of the models in Taiwan working hard to fulfil circular economy. In addition, he also advocates “Initiative+Creativity+Business” as a way to sustainability and compares climate change and net zero transformation to the Age of Discovery, only through teamwork like an alliance (every one is like the helmsman and CJCU is like the great helmsman) can we find a way to sustainability for net zero transformation and carbon neutrality. 

TDEA President Lai-Chu Chen said that no one expected that the EU would determine to impose carbon taxes. In addition, after 2023, Taiwanese companies with their annual revenue over NTD 10 bn also have to disclose their greenhouse gas emission in annual reports certified by a third party, which is quite nerve-racking.

"Taiwan’s Pathway to Net-Zero Emissions in 2050” published by NDC is changing our work, life, and commercial patterns. Such a rapidly changing environment is beyond our expectations. In order to respond to such complex future, it is expected that through the co-learning system of Zero+ College, member can work as a team to face challenges, which may perhaps be a bit late in the beginning, but winning in the end is still possible.