Taiwan’s umbrella manufacturing industry was once a thriving global powerhouse with a total export volume exceeding NT$10 billion (US$314.5 million at the current exchange rate) per year in the 1960s and 1970s. However, the lure of cheap labor precipitated an industry-wide exodus to China in the 1990s, followed by a long decline from which it has yet to recover.
One company defied this trend: Yamaiji Umbrella Manufacturing Co, which holds a 60 percent share of the global high fashion umbrella original equipment manufacturing market.
Yamaiji is thriving and has begun relocating its manufacturing to Taiwan.
Photo: Chiu Yi-tung, Taipei Time
Yamaiji, which is estimated to generate US$3 million in revenue each year, makes umbrellas under contract for labels such as Celine, Burberry, Fendi, Yves Saint Laurent, Valentino, Lanvin and Anna Sui, with its products carried by models at international fashion shows, Yamaiji chairman Lee Ming-chih (李銘智) said.
Lee, 61, has worked in the umbrella industry since he was 15, when he apprenticed at a factory, he said.
At the time, he indulged in daydreaming about making umbrellas as “beautiful as pieces of art and treasured by their owners like collectibles,” he said.
In 1984, he borrowed NT$10 million to open his first factory in Taoyuan, establishing Yamaiji. Like Taiwan’s other umbrella makers, Yamaiji served the mass consumer market in its first years of operation, churning out low-cost products, Lee said.
His vision of designer umbrellas had been temporarily shelved, but things began to change in the 1990s, when the firm followed its competitors in moving manufacturing to China, he said.
However, soon after establishing factories in China, it was apparent to him that a crisis loomed over the Taiwanese umbrella industry, Lee said.
“Chinese are superb duplicators, and as a labor-intensive industry that lacked advanced techniques, Taiwan’s umbrella sector was vulnerable to replacement by the Chinese,” he said.
Chinese workers at Taiwanese factories would learn about umbrella manufacturing on the job and, once they had mastered the entire process, many left to start their own businesses, leading to a proliferation of Chinese firms and disruptions of market prices that were unfavorable to Taiwanese businesses, Lee said.
Foreseeing the decline of Taiwan’s umbrella industry and the threat of a hostile takeover, Lee kept his business operations in Taiwan separate from Yamaiji’s manufacturing plants in China and began to reorient the company to produce the high fashion umbrellas that he had wanted to make as a young man.
“As predicted, the other Taiwanese umbrella companies fell by the wayside,” Lee said.
By 1993, Yamaiji’s transformation was under way, with a restructuring in favor of a large research and development department and quality manufacturing, Lee said, adding that the process was challenging on many occasions.
For example, one of Yamaiji’s first forays into the Japanese luxury umbrella market was nearly disastrous, as 6,000 umbrellas it had produced and delivered to Japan were rejected by the client because of fading embroidery, incurring millions in losses, Lee said, adding that the faults were identified and the client renewed the contract after Lee’s profuse apologies.
Yamaiji’s first contract with a Western high fashion label was with Celine, a French brand whose representatives initially refused to take the Taiwanese firm seriously.
At initial negotiations in France, Lee was greeted by a low-ranking manager, he said, adding: “They thought they were too good for me and would not even give me the time of day.”
While discouraged, Lee decided to impress the French company by purchasing a Celine handbag and cutting off its label, which he stitched to a sample umbrella that he presented at a later meeting, Lee said, adding that resulted in collaboration between the two companies that continues to this day.
Gaining Celine as a client opened doors to other endeavors, and Yamaiji now manufactures designer umbrellas for more than 200 international brands, with its products sold for thousands of New Taiwan dollars each, Lee said, adding that its custom-made umbrellas fetch prices of more than NT$100,000 each.
Value-added components are debatably the most important parts of an umbrella, as people pay more for innovative designs and quality materials and construction, he said.
In a bid to keep up with fashion trends, about 30 percent of Yamaiji’s employees focus on research and development, which has an annual budget of millions of dollars, Lee said.
When asked about his decision to relocate manufacturing from China to Taiwan, Lee said that the difference in labor costs is narrowing, adding that he believes it is possible to revive living room workshops that were a major feature of Taiwan’s economic takeoff.
“Chinese can mass-produce any common umbrella. Taiwan must emphasize design to keep up its leadership,” he said.
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