For companies with a strong OE business, setting up a production close to large assemblers is a must. For this reason, Velo Enterprise has opened a factory in Vietnam’s Binh Duong province. The Show Daily was on-site in Vietnam.
With its headquarters in Taichung’s Dajia district, two factories in Taiwan and two more in China, Velo Enterprise has grown to become a leading supplier of quality saddles, bar tapes and grips. Only a small fraction of the 15 million saddles produced every year are sold on the aftermarket under the Velo and Prologo brands, with many big names in the industry relying on Velo Enterprise’s expertise in crafting branded saddles and grips. In late March, the Show Daily visited Velo Enterprise’s newest factory that has been set up in Ben Cat’s Protrade International Tech Park which now houses a total of nine bicycle-related companies.
While construction of the offices and the factory hall had already been finished, production operations were still being set up in March. “A three-month lockdown and closed borders during the pandemic delayed the construction of our Vietnam factory. But given the drastic drop in demand for bicycles in key export markets since mid-2022, this delay has given us plenty of time to get the layout right,” Velo Enterprise’s CEO Ann Chen explained. “Our older factories have grown organically to cover multiple floors while at 28,000 m2 the Vietnam factory boosts plenty of space on just one floor, offering better efficiency. And since Vietnam does not allow for the import of used machinery, this factory will be equipped with state-of-the-art machinery.”
The Vietnam factory has a capacity of up to six million saddles a year, focusing on volume models, while production of upper-end saddles and related R&D efforts is being kept in Taiwan. “With companies such as Giant, Fuji Ta, Fritz Jou Manufacturing and KTM Bike Industries all investing in large factories in Southern Vietnam’s Binh Duong province since 2020, the demand for our saddles is set to increase significantly as soon as demand is back up. As a supplier Velo aims to keep distances and lead times short. So setting up a factory in Ben Cat to cover the needs of customers in Southeast Asia was a logical step for us,” according to Chen.
Due to low demand Velo Enterprise has not been hiring a lot of staff for its Vietnam factory just yet. But the company has an ace up its sleeve, as Ann Chen points out: “At Velo we have been employing contract workers from Vietnam for many years, so now we can send these skilled workers to Vietnam as mentors for new staff as they already know our standards and expectations in terms of quality and reliability.”