Market Changes in Raw Materials Accelerate the Transformation of Lighter Manufacturing Enterprises in Zhejiang |
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By: Tootoo.com Posted: 2008-07-16 06:20:01 |
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Regional market analysts from Tootoo.com said that 860,000 SMEs in Zhejiang province, China, have recently entered into a state of crisis, fighting for their very survival, due to the rising costs of raw materials, the appreciation of the RMB and other market changes. Among them, the labor-intensive enterprises, especially lighter manufacturing plants are in serious trouble because of non-ferrous metal prices climbing and human resources costs increasing.
Editors from the non-ferrous metal industry channel of Tootoo.com ( http://news.tootoo.com/Minerals/Metal/ ) interviewed a manager from one of the struggling lighter companies, who said that his factory had just received a two million unit lighter order from a foreign company, with each sale price being a mere USD0.92. And, although the profit was just a few cents per lighter, the manager had to accept. It is hard to get an order like this, since less than 100 plants among more than 500 lighter manufacturers in Wenzhou can start production. Wenzhou is China's metal lighter manufacturing base, home to companies like Wenzhou Lucheng Yikang Lighter Factory ( http://www.tootoo.com/d- c3130483-Wenzhou_Lucheng_Yikang_Lighter_Factory/ ), who shares 70 percent of global lighter market. However, lighter exports have dropped sharply since last year, by reason of the increasing prices of plastics, chemical raw materials and non-ferrous metal alloys such as copper and zinc, as well as the appreciation of the RMB. Therefore, local lighter manufacturing plants are eyeing high value-added products to replace the traditional products. In the interview, the manager told editors of Tootoo.com that they have just developed "hurricane lamp lighters", which can be used at altitudes of up to 2,500 meters. Seizing the market blind spots, the product, which is exported to countries that include Mexico and Colombia, brought back a large number of orders. Developing high- end lighters and industrial upgrading is currently the way out for the Wenzhou lighter industry ( http://www.tootoo.com/w-Gifts_Crafts/ ). Analysis of exports from Tootoo.com highlight that the cost of the traditional lighter has increased by 20 percent, as raw materials and labor costs continue to rise, which brings almost no profit. In contrast, the profits of the "hurricane lamp lighters" ( http://www.tootoo.com/buy-wenzhou_lighters/) are as high as 40 percent, with the same increases in costs. To this end, the Zhejiang government has decided to open up the international and domestic markets to broaden financing channels and to take various measures to help the enterprises out of this slump. Not long ago, in the "government-enterprise interaction" services, the relevant departments of the Wenzhou government listed the difficulties encountered by the lighter industry into the response program. For more information, please contact: TooToo.com Tel: +86-10-9510-5561 Fax: +86-10-6584-9900 Address: 19th Floor, Block One, Majestic Towers, Gongti Dong Road, Beijing, 100020 China Post Code: 100020 |
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