Taiho Plastics Industries Private Limited
In 1976, Mr. Wong Ling Kah one of the co-owners of the family-owned Taiho Plastics Industries took over the management of the company and later became the managing director. Between 1978 and 1982, as the industry was trying to counter the effects of recession, Mr. Wong moved to invest for an approximate amount of $5.2 Million to replace their outdated hong kong extruder, sealer, and cutter with more efficient Japanese machinery. These were financed through loans from financial institutions. Such a decision was considered unwise by people within the business community. Mr. Wong however, personally believed that the investment was justifiable taking into consideration the lower unit cost and the company’s plan to be competitive in the international market. The manufacturing of plastic bags consist of three basic processes: extrusion, printing and cutting, and sealing. The maximum working capacity of the machines is 350 tons per month. Cost of production has fallen from $3,914,831.00 in 1980 to 3,846,254.00 in 1981. To meet production date lines and high volume of orders, the company may increase the number of shifts per day. There may be from 1 to 3 shifts depending on the work load. Production is stopped once every two weeks to allow both man and machine to rest. Plastic resins are the main raw materials which form 65% of total cost in comparison to direct costing and overheads which account for 25% and 10%, respectively. These raw materials are imported through trading companies or subsidiaries of resin manufacturers. Shipments of these raw materials usually take two to three months and sometimes four months. Taiho is in good terms with its suppliers and so far has only experienced minimal problems, even during times of tight supply. The company however, does not practice any formal system of stock control. It restocks every 15 days, and if the company should require more, it will...
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