TAIWAN: Brand Licensing Agreement Via IBA

TAIPEI: San Sun Hat & Cap Co., Ltd, a Taiwan-based leading hat-maker and exporter acquired a license to sell hats and caps carrying "Kinloch Anderson," a brand owned by the UK-based Kinloch Anderson Ltd, in Taiwan and the U.S.

The partnership between the two different businesses has been matched through CETRA's international brand alliance (IBA) project, which involves bringing domestic manufacturers to collaborate with internationally brand owners.

The aim, says CETRA President Hsu Chi-ren, is "to steer Taiwan's OEMs (original equipment manufacturers) to sell prominently-labeled products, so they can survive an era of slim margins and the mainland's booming manufacturers."

Lui Wen-rui, deputy director of CETRA's Market Development Department, says IBA projects are most suitable for domestic manufactures that have research and development (R&D) capabilities.

On the other hand, the brand owners sought are companies with channels for their products. Currently, there are 19 U.S. and European brand owners offering 20 brand names for the IBA licensing program, for example, Sunkist (U.S.), Daniel Hechter (France), and Laura Ashley (UK).

Day Seng-tong, chairman of San Sun Hat & Cap Co., Ltd, in explaining the first licensing model through IBA, says exports have been and still remains Taiwan's major competitive advantage in the global marketplace. OEM, Day says, is a "diminishing channel that has no profit, and can be quickly replaced."

"In the past, Taiwan beat its rivals with low prices, quality products and manufactures, but the mainland will soon dominate the global manufacturing industry, and there is not much room for Taiwan to survive or take part in such a boom," he said.

"As to our manufacturers' alternatives," Day said, "one is them to create your own brand names, but this is quite costly and there's still a long way for our small and medium sized enterprises. The best solution thus lies in brand alliances."

With the IBA's assistance, a traditional manufacturer can pay a royalty, and get hold of the advantage of prestigious brand-holders and enjoy their well-cultivated channels.

The IBA program begins this year, designed and promoted by CETRA's Consumer Goods Section of the Market Development Department. At present, it encourages manufacturers capable of providing quality products and specializing in sundries, stationery, garments, glasses and watches, bags and luggage, and home wares. -Agencies.

October 9, 2003

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Added: October 9, 2003
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