Home Textiles. Essential sourcing intelligence for buyers

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1 Essential sourcing intelligence for buyers Shandong Jiangsu Zhejiang China manufacturer profiles Detailed profiles of 39 suppliers with verified manufacturing and export credentials Product & price trends Prices and specifications of 89 top-selling export products Home textile supply centers Supply centers & market trends Coverage of leading and emerging supply centers, plus insight into capacity, output and R&D March 2008 US$445 wwwchinasourcingreportscom

2 China Sourcing Reports

3 EXECUTIVE SUMMARY home textiles Supplier capability in China Executive Summary China s $8-billion home textile industry continues to register steady growth since Global Sources first analyzed the line in August 2005 Exports are projected to exceed $95 billion by the end of 2008, increasing by a robust 15 percent from the previous year Bedding remains the biggest export product category, accounting for 53 percent of the overall sales in 2007 Towels, drapery and table linen follow, making up 24, 17 and 6 percent of total exports, respectively Even though faced with various challenges such as surging operating costs, the yuan s revaluation, fierce competition and export restrictions in key markets, many suppliers remain optimistic of increased revenue in the months ahead While North America and Europe still take up the bulk of shipments, exports to emerging destinations such as Eastern Europe and the Middle East are gathering pace Companies are also gaining competitiveness in the upscale market, with the introduction of environmentfriendly designs Demand for bath towels and bed linen made of soybean, bamboo and other organicbased fabric is increasing in Europe and Japan The following are some of the key trends we see in China s home textile export industry: Export prices will increase by 5 to 10 percent to cover for higher operating expenses The rising cost of fabric tops the list of factors forcing suppliers to implement the upcoming markups Pure cotton bedding and bath towels will be produced in greater numbers in response to rising demand for supersoft, natural home textiles Many companies in China will also develop environment-friendly designs, adopting fabric that complies with the Oeko-Tex Standard 100 Some companies are shifting upmarket, as seen in the increased output of functional towels with deodorizing and germ-killing properties, window curtains in voile, jacquard and taffeta, and quilts with goose down filling Capacity expansions will be prevalent in 2008 as domestic and overseas demand continues to grow At most manufacturing operations, increases in capacity will be between 20 and 50 percent This updated report covers bedding, towels, drapery and table linen categories that dominate China s home textile exports The latest design trends, materials and price ranges of low-end, midrange and high-end home textiles are detailed in the Products & Prices section The Supplier Survey highlights the outlook on prices, capacity expansions, sales performance and trends for 2008 The Industry Overview analyzes the export performance of China s home textile industry for 2007, as well as the issues and challenges makers contend with It also differentiates the production capability of small, midsize and large players, and identifies the key manufacturing hubs in the line Most home textile suppliers in China are locally owned companies with direct manufacturing capability Reflecting this industry structure, 86 percent of suppliers interviewed for this report are China-owned Five percent are state-owned, and the rest are foreign-invested Companies are also highly exportoriented A huge majority of featured companies ship out between 75 percent and 100 percent of their output OEM and ODM orders comprise the bulk of orders Only a handful of suppliers market their in-house brands overseas Production is concentrated in Shandong, Zhejiang and Jiangsu provinces In this report 14 in-depth company profiles 25 short company profiles 89 top-selling export products Supplier demographics Supplier survey Industry statistics & charts METHODOLOGY To produce this report, Global Sources surveyed a wide range of suppliers Rather than focus simply on high-profile makers, we compiled a representative sample of large, midsize and emerging manufacturers All profiled companies are export-oriented professional suppliers that may or may not be clients of Global Sources The selection of suppliers is designed to reflect the composition of the industry in China in terms of geographic spread, business type and company ownership For each company profile, our research teams interviewed senior executives and export managers who discussed their recent performance and provided price, R&D, production and export forecasts for the next 12 months The interviews were done in person, by phone or In each case, companies were required to answer specific questions designed to verify their manufacturing and export credentials, including their production and export statistics, and a breakdown of exports by product type and market Our production checklist details the product-specific manufacturing capabilities of each supplier All suppliers participated in a survey designed to provide insight into product and price trends, and challenges facing the industry in the next 12 months All survey questions are single choice Results were calculated based on the actual number of valid responses to each question wwwchinasourcingreportscom

4 CONTENTS CONTENTS INDUSTRY OVERVIEW 7 Supplier summary Export statistics Main production centers Suppliers by location Products & prices 11 Price guides Top exporters Supplier survey 15 Export prices, export sales, major challenges, target markets, capacity expansion plans, product trends, efficiency, capability SUPPLIER PROFILES 19 Supplier locations Industry composition Top 20 exporters Supplier matrix Production checklist Supplier profiles PRODUCT GALLERY 71 Top-selling export products SUPPLIER CONTACT DETAILS 89 Copyright 2008 Trade Media Limited All rights reserved Reproduction in whole or in part in any form or medium without express written permission of Trade Media Holdings Limited and Trade Media Limited is prohibited Published by Publishers Representatives Limited (on behalf of Trade Media Limited) PO Box 219 GT, Strathvale House, North Church Street, George Town, Grand Cayman, Cayman Islands c/o 22/F Vita Tower, 29 Wong Chuk Hang Road, Aberdeen, Hong Kong Printed in Singapore ISBN X Disclaimer: Any recommendation contained in this report may not be suitable for all investors or businesses Moreover, although the information contained in this report is obtained from sources believed to be reasonably reliable, the accuracy or completeness of such information cannot be guaranteed The author and the publisher of this report (and the publisher s affiliates, agents, sales representatives and service contractors) do not make any representation or warranty whatsoever (whether express or implied) in relation to any of the contents of this report (including any information, opinion, recommendation or conclusion contained in this report) (collectively, Contents ), whether as to the accuracy, completeness, quality, fitness, suitability or reliability of such Contents (or any portion thereof ) or otherwise, and shall not be liable under any circumstances whatsoever for any error, omission, defect or deficiency in, or for any use of or reliance on, such Contents (or any portion thereof) All product images are provided by the companies interviewed and are for reference purposes only Those product images featuring products with trademarks, brand names or logos are not intended for sale Products that are not the specific topics of editorial articles are shown for illustrative and/or demonstrative purposes only We, our affiliates, and our affiliates respective directors, officers, employees, representatives, agents or contractors, do not accept and will not have any responsibility or liability for product images (or any part thereof) which infringe on any intellectual property or other rights of a third party China Sourcing Reports

5 InDUSTRY Overview INDUSTRY OVERVIEW China continues to be the leading supplier of home textiles in the world, shipping out more than $8 billion worth in 2007 This is an increase of 15 percent from the year before Volume also went up by 7 percent to reach 63 billion pieces Most suppliers expect similar growth levels in 2008, but some are slowly moving focus to other regions where demand has been rising substantially in the past years Among these are the Middle East and Eastern Europe, where export share has collectively increased from 16 percent in 2005 to 24 percent in 2007 Russia and the UAE are currently among the top 10 importers of China-made home textiles Companies that offer lower priced models are finding it easier to move into these markets, as quality requirements are less stringent than those in the EU, Japan and the US The majority of suppliers, however, still consider North America as their main market Consequently, the US remains the foremost destination for home textile shipments, accounting for 28 percent of export value in 2007, with Canada taking up the remaining 3 percent for the region Asia is still the second-largest market, with Japan constituting 14 percent of export value Exports of bedding, which makes up half of China s overall home textile shipments, totaled $45 billion in 2007 This is an increase of 16 percent, slightly higher than the 135 percent growth rate of the previous year The US takes in a large majority of shipments in the line Its imports last year were valued at $13 billion Japan was a far second, absorbing $509 million worth during the same period Towels are the next-largest category, representing 24 percent of China s total exports in 2007 Overseas sales surpassed $2 billion, one-fourth of which were orders from Japan The US and Russia were the other major markets Sales grew by 17 percent last year, up from the 15 percent growth two years ago Drapery shipments also improved, particularly of synthetic fiber curtains to the US Last year s total exports were close to $15 billion, up by 14 percent from the previous year Exports of table linen, the smallest category in terms of export value, amounted to $490 million in 2007, a modest increase of 3 percent from 2006 The industry is generally optimistic, with more entrants recorded for the year, and established garment enterprises extending their offerings to include home textiles Strong domestic demand, driven by a tourist boom and improved housing conditions, is also encouraging makers to increase output In this report, most will raise production capacity by 20 to 50 percent in the next 12 months OEM/ODM/OBM partners Company Chizhou Shingwoo Jiujiang JM Homeystar Nantong Alt Nantong Longdu Ningbo Veken Elite Ningbo YF Qingdao Fuyuan Shandong Charming Shandong Refinee Shaoxing Bolan Wuxi Jielong Zhejiang Lanxi Lida Zhejiang Orient Creation All surveyed suppliers Major customers Netto (Germany) Supplier summary Suppliers surveyed 39 Export sales $4705mn Export ratio 92% OEM business 74% Capacity utilized 82% Annual R&D spending $188mn Full-time employees 29,589 All surveyed suppliers Challenges ahead Despite the positive outlook, however, companies are still faced with difficulties that have to do with higher raw material costs, the yuan s revaluation, export tax rebate cuts and fierce competition from other countries In the past year, the cost of synthetic fabric has increased by at least 10 percent per kilo due to escalating rates of oil in the world market, while that of rayon staple fiber, used mainly in bedding and drapery, rose by 30 TG Parquet Co (Greece), Kenya Bay Beach Hotel Ltd (Kenya) Coca-Cola, Wal-Mart, JC Penney (US), Vodafone (Germany) Anaik (France) Springs Global, WestPoint Home (US), Dorma (UK) Betten Duscher GmbH (Germany), HMG Bedtextiel BV (Netherlands), Down Decor (US) Wal-Mart, Target Brands, Inc (US) JC Penney, Kmart, Target, WestPoint Home (US), Mothercare UK Ltd, Marks & Spencer, Dorma (UK), Alinea (France) QVC, Inc (US), Faupel Home Furnishings Ltd (UK) Wal-Mart, Target, JC Penney, Dollar General, Family Dollar (US) Pacific Coast Feather, Hollander (US) Disney (US) Sears (US), Coles (Australia), QVC (Germany) wwwchinasourcingreportscom 7

6 Supplier profiles Anhui Honren Co (Group) Ltd ISO 9001:2000-certified Anhui Honren specializes in down feather quilts and bedding sets Among the largest home textile makers in China, the company operates seven factories that occupy a total area of 330,000sqm Recently, it established a 500,000sqm production complex that will be fully operational by April 2008 Half of Anhui Honren s bedding products are midrange, with high- and low-end versions accounting for 30 and 20 percent, respectively One-third of shipments carry the in-house Honren brand Designs meet the Oeko-Tex Standard 100 The in-house R&D team creates one new design in 40 to 60 days, and makes samples in three to seven days Low-end quilts are made of locally sourced T/C fabric with a thread count of between 120 and 132 They are dirtand wrinkle-resistant, and measure 152x203cm Prices range from $18 to $30 per piece Midrange versions come in pure or jacquard cotton fabric with antibacterial properties and a thread count of 250 to 400 Priced between $30 and $40 each, these have dimensions of 152x203, 173x224 or 224x234cm Models also feature embroidery or patchwork High-end designs adopt pure or silk cotton, which contains environment-friendly components such as soybean fiber With a thread count of up to 1,000, the materials have anti-microbial and static, and shrink-resistant properties Most products feature intricate embroidery or patchwork in three or more colors Prices start at $40 Anhui Honren also offers four-piece bedding sets that go mostly to Europe and the US A standard set consists of a bedcover, a bedsheet and two pillowcases Quilts may be included on request Some 24-piece versions, which also contain pillows and bedroom curtains, are exported mainly to the US Production pieces/mth Capacity Output Exports Sales $mn/year Total sales Sales (home textiles) Exports (home textiles) 600, , , Profile Company facts Year established 1991 Head office location Tongcheng (Anhui) Business type Manufacturer: Direct exporter Ownership Mainland China-owned Factory location(s) Tongcheng (Anhui) Total factory area 330,000sqm Full-time employees 1,200 Total annual sales (all products) $600mn Annual R&D spending $100mn ISO certified Yes Sales & output: Home textiles Annual sales $600mn Share of total sales 100% Annual export sales $400mn Total monthly capacity 600,000 pieces Average monthly output 500,000 pieces Capacity utilized 83% Average monthly exports 450,000 pieces Export ratio 90% OEM % of exports 50% ODM % of exports 20% OBM % of exports 30% Contact details Business contact LIU Kejing Phone (86-556) Fax (86-556) liukejing@honrencn honren@honrencn URL englishhonrencomcn wwwglobalsourcescom/hongrunco Address Honren Industrial Estate, Tongcheng Economic Development Zone, Anhui, China 28 China Sourcing Reports

7 Supplier profiles Capability Popular export models Production checklist Assembly lines R&D/design staff 20 QC staff 80 Cutting machines 10 Sewing machines 1,000 Embroidery machines 4 Quilting machines 48 Needle detectors 4 Image file name D-9375 Quilt Model Minimum order Packaging type Delivery time Indicated price HR pieces PVC, nonwoven bag 20 days Exports by product Bedding 95% Drapery 3% Table linen 2% Towels Description: 100% cotton sateen; white microfiber filling; 60x40s, 173x124 thread count; shrink-resistant; 350gsm; 2184x2286cm Exports by market Nth America 20% European Union 45% Europe (non-eu) 10% Middle East/Africa 3% Asia 15% Other 7% Image file name D-932 Quilt Model Minimum order Packaging type Delivery time Indicated price HR pieces Carton gift box 45 days Outlook Export prices Increase more than 15% Export sales Increase 10-20% Production capacity Increase up to 20% Expansion plan Build or move to new or additional factory Main target market Nth America Hot product trend Environment-friendly materials Major challenge Price competition Efficiency improvement Upgrade management systems Capability improvement Shorten design & development lead time Description: Printed silk; 90% goose down filling, 280gsm; 2235x2337cm Image file name D-9956 Quilt Model Minimum order Packaging type Delivery time Indicated price HR pieces PVC, nonwoven bag 20 days Description: 90% goose down filling; 60x60s, 140x140 thread count; antibacterial, shrink-resistant; 250gsm; 2184x2286cm Information not disclosed wwwchinasourcingreportscom 29

8 PRODUCT GALLERY PRODUCT GALLERY Bedding Image file name: AP3322jpg Image file name: AP4311Bjpg Image file name: AP3306jpg Anhui Honren (profile page 28) Model: HR006 Minimum order: 300 pieces Packaging type: PVC, nonwoven bag Delivery time: 20 days Description: Quilt; 100% cotton sateen; white microfiber filling; 60x40s, 173x124 thread count; shrink-resistant; 350gsm; 2184x2286cm Anhui Honren (profile page 28) Model: HR003 Minimum order: 600 pieces Packaging type: Carton gift box Delivery time: 45 days Description: Quilt; printed silk; 90% goose down filling; 280gsm; 2235x2337cm Anhui Honren (profile page 28) Model: HR005 Minimum order: 300 pieces Packaging type: PVC, nonwoven bag Delivery time: 20 days Description: Quilt; 90% goose down filling; 60x60s, 140x140 thread count; anti-bacterial, shrink-resistant; 250gsm; 2184x2286cm Image file name: AP4333jpg Image file name: RH-B232jpg Image file name: YJ-D14jpg Anhui Light (profile page 30) Model: ZW102 Minimum order: 500 pieces Packaging type: Carton Delivery time: 35 days Description: 100% polyester; 200gsm cotton filling; printed Anhui Light (profile page 30) Model: ZW101 Minimum order: 500 pieces Packaging type: Carton Delivery time: 35 days Description: 100% cotton; 200gsm cotton filling; printed Anhui Light (profile page 30) Model: ZW135 Minimum order: 500 pieces Packaging type: Carton Delivery time: 35 days Description: Quilt; 100% cotton; 200gsm cotton filling; patchwork Information not disclosed wwwchinasourcingreportscom 71

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