Garment Trimmings. Essential sourcing intelligence for buyers

Transcription

1 Essential sourcing intelligence for buyers China manufacturer profiles Detailed profiles of 14 verified suppliers and contact details of an additional 12 exporters August 2009 US$395 Guangdong Zhejiang Garment trimmings supply centers Product & price trends Prices and specifications of 57 top-selling export products Supply centers & market trends Coverage of leading and emerging supply centers, plus insight into capacity, output and R&D wwwchinasourcingreportscom

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3 EXECUTIVE SUMMARY GARMENT TRIMMINGS Supplier capability in China EXECUTIVE SUMMARY China s garment trimmings industry is bracing for an even more challenging trade environment as the global economic downturn continues to affect exports adversely Overseas shipments for the first five months of the year reached $1 billion, down 25 percent from the previous corresponding period This came after growth in 2008 slowed to a meager 6 percent In stark contrast, 2007 export sales were up a healthy 33 percent Given the current economic difficulties, the majority of suppliers are not expecting to recover in the months ahead In fact, more than half of the companies surveyed for this report are projecting negative growth Falling revenue is exacerbated by intense price competition, which is forcing many suppliers to cut quotes between 5 and 15 percent To maintain sufficient cash flow despite dwindling sales and drastically reduced product prices, manufacturers have had to rethink their business strategies, including order parameters The following are some of the key developments we see in China s garment trimmings industry: Many factories will continue laying off inefficient or less-skilled workers or reducing their monthly salaries as means of cutting costs Companies will be increasingly selective of the buyers they will be transacting with and the orders to accept Many of them will assess client stability carefully before finalizing contracts Others are even rejecting production runs that are worth less than $75,000 Such prudence is adopted to minimize revenue loss Export prices are likely to fluctuate in the months ahead Makers are closely monitoring trends in material costs and the yuan-dollar exchange rate While the primary purpose is strategic procurement, quotes will also be adjusted accordingly China suppliers produce applique, buttons, cord, decorative yard goods, garment hooks, hook-and-loop tape, loose trims, ribbons, tape and zippers These are also the scope of this report Each product category has its own section with details on the features and prices of low-end, midrange and highend models The manufacturing and QC processes are discussed for the key products as well The section also elaborates on the industry composition, highlighting key characteristics of the different types of companies The Industry Overview illustrates the effects of the current economic downturn on suppliers export sales and growth projections Further, it explains the measures makers are taking to minimize losses This section also reviews the major export and manufacturing hubs for each product category The garment trimmings export manufacturing industry in China is comprised of small and midsize companies Approximately 80 percent of all suppliers are private locally owned companies, and the rest have foreign participation The provinces of Zhejiang and Guangdong are the main production centers for garment trimmings The largest hub, Zhejiang contributes more than half of national exports Guangdong is the second-biggest center for garment trimmings, accounting for 24 percent of shipments in the line Reflecting this structure, more than two-thirds of suppliers profiled in this report are private local businesses Less than 30 percent have participation from Hong Kong companies and the rest are foreign-invested More than 40 percent of featured companies come from Zhejiang and 36 percent are from Guangdong In this report 14 in-depth company profiles 12 additional suppliers 57 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 in-depth company profiles, 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 capability of each supplier All profiled companies participated in a survey designed to provide insight into product and price trends, and challenges facing the industry All survey questions are single choice Results were calculated based on the actual number of valid responses to each question wwwchinasourcingreportscom 3

4 CONTENTS CONTENTS INDUSTRY OVERVIEW 7 Supplier summary Export statistics Main production centers Supplier demographics Zippers 11 Buttons & snaps 16 Hook-and-loop tape 18 Loose trims 19 Applique & transfers 20 Tape & ribbons 21 Trims, cord & fringe 22 Supplier survey 23 Export prices, export sales, major challenges, target markets, capacity expansion plans, product trends, efficiency, capability SUPPLIER PROFILES 27 Supplier locations Industry composition Exporter ranking Supplier matrix Production checklist Supplier profiles PRODUCT GALLERY 65 Top-selling export products ADDITIONAL SUPPLIERS 79 Key products, contact details Copyright 2009 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) 4th Floor, Century Yard, Cricket Square, Elgin Avenue, PO Box SMB, George Town, Grand Cayman, Cayman Islands c/o 22/F Vita Tower, 29 Wong Chuk Hang Road, Aberdeen, Hong Kong ISBN 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 4 China Sourcing Reports

5 INDUSTRY OVERVIEW INDUSTRY OVERVIEW China suppliers of garment trimmings are adjusting their export strategies to remain profitable amid the tough economic climate In the first nine months of 2008, exports of clothing fasteners and decorative elements amounted to $275 billion, 13 percent higher than the same period in 2007 The figures reflect the steady increase of average unit prices due to the appreciation of the yuan, and the surge in raw material, labor and energy costs throughout the span Since the global financial crisis hit in the last quarter of 2008, however, sales have been declining Even as companies lowered quotes after costs fell and the yuan stabilized, demand from foreign garment manufacturers waned From October to December 2008, overseas revenue was only $845 million, a decrease of 11 percent year on year The income from January to May 2009 was a little more than $1 billion, dropping 25 percent from the previous corresponding duration In fact, many companies saw business reduced to one-half or even one-third of early 2008 transactions As a result, the supplier base contracted by 20 to 30 percent Factories that shut down were mostly small assembly plants with fewer than 100 workers For surviving makers, cash flow has been a major concern Some companies have had to suspend or dismiss employees, or reduce their wages in order to cut costs Material and salary disbursements continue, however, while many buyers delay their payments Assets are therefore being depleted This is exacerbated by the risk of default from customers that are also facing problems with profitability The situation has pushed many suppliers to apply for loans Most of the time, a poor credit standing prevents makers from acquiring funds with manageable interest rates and payment terms from banks In response, the China government has encouraged financial institutions to simplify lending procedures and loosen credit standards, especially for SMEs Some business owners also approach family and friends for fiscal aid This practice is common in Zhejiang province, where many private individuals have substantial wealth and familial relationships are strong To manage risks, suppliers are being selective in accepting orders They try to assess the stability of clients before signing contracts A few midsize and large companies are even rejecting transactions that are less than $75,000 In addition, exporters are closely monitoring trends for material costs and the exchange rate The aim is to make component purchasing strategic and thereby maintain an ideal inventory Product prices are also adjusted regularly to create a balance between healthy margins and competitiveness Some enterprises even do this on a weekly basis As a means of boosting profits, the China government implemented three rounds of tax rebate increases last year The first two in August and November adjusted the rate for textile trimmings from 11 to 14 percent In December, the refund for zippers, and leather and feather accessories was raised from 11 to 13 percent While this was meant to prop up earnings, some buyers cite the policy change when bargaining for lower prices But even reduced quotes have not helped boost dwindling demand For makers, the benefits of the tax rebate increase are therefore not as significant as expected Aggravating the problem of lower consumption for zipper companies is the imposition of anti-dumping duties by some nations Measures from Turkey were implemented in 2005 Since then, the country fell from being the top importer of China-made zippers to the third Egypt, the 14th-largest market, Supplier summary Suppliers surveyed 14 Export sales $937mn Export ratio 37% OEM business 55% Capacity utilized 54% Annual R&D spending $52mn Full-time employees 10,100 Data: All surveyed suppliers levies $120 per kilogram on slide fasteners entering its ports This is in effect until 2013 Argentina, which follows in rank, also announced provisional duties until June this year At the time of this writing, the country has not yet announced whether the tariff will continue to be enforced The impact from Egypt s and Argentina s policies has not yet manifested, especially because shipments to these areas are relatively small Some suppliers are concerned, however, that since clients are also dealing with slower turnover, they will begin to be more sensitive to the additional fees Capability upgrades Garment trimming suppliers are streamlining operations to enhance efficiency and quality The main approach for this objective is specialization because the myriad product types in the industry require different materials, machinery and skill sets To reduce the amount of investment, companies concentrate on one or two categories Within the chosen field, makers are now acquiring advanced equipment that is faster and more precise Some are also purchasing parts for existing units For example, zipper manufacturers are buying automatic zipper pull tab assembly lines that are 10 times more efficient than manual production and metal teeth-making machines from Japan, South Korea and Germany Rhinestone companies are replacing worn-out grinding wheels with new wwwchinasourcingreportscom 7

6 SUPPLIER PROFILES D&G Industrial Co Ltd A joint venture between investors from Hong Kong and Sweden, D&G produces an average of 60 billion jeans buttons and rivets, dress hooks, snap fasteners, eyelets, pull tabs and metal plate trimmings every month The majority of output is exported to the EU, the Asia-Pacific region and North America Overseas revenue reached $16 million last year OEM orders account for 90 percent of shipments The rest is under ODM contracts Apart from garment trimmings, the company manufactures belt buckles JC Penney, Esprit and H&M are among its major clients Based in Hong Kong, D&G operates two mainland China factories with an overall area of 40,000sqm Located in Guangdong and Jiangsu provinces, the plants have cutting, stamping and die-casting machines Of the company s 1,000 full-time workers, 100 are in charge of QC A 50-member team handles R&D, which receives a yearly allocation of $100,000 The EU will be its main export destination in the next 12 months Profile Production pieces/mth Capacity Output Exports 100,000,000,000 60,000,000,000 48,000,000,000 Company facts Year established 1988 Business type Manufacturer Company ownership Joint venture Head office location Hong Kong Number of factories 2 Factory location(s) Dongguan (Guangdong), Wuxi (Jiangsu) Total factory area 40,000sqm No of full-time employees 1,000 No of R&D/design staff 50 No of QC staff 100 Annual sales (all products) $200mn Annual R&D spending $100,000 ISO certification Yes Sales $mn/year Total sales Sales (Garment trimmings) Exports (Garment trimmings) Sales & output: Garment trimmings Annual sales $190mn Share of total sales 95% Annual export sales $160mn Total monthly capacity 100,000,000,000 pieces Average monthly output 60,000,000,000 pieces Capacity utilized 60% Average monthly exports 48,000,000,000 pieces Export ratio 80% OEM % of exports 90% ODM % of exports 10% OBM % of exports Major customers JC Penney (US); SOliver, Esprit (Germany); H&M (Sweden); Armani Jeans (Italy) Other products made Belt buckles Contact details Business contact NG Dennis Phone (852) Fax (852) sales@dngbuttonscom URL wwwdngbuttonscom wwwglobalsourcescom/dngco Address 2F Charm Centre, 700 Castle Peak Road, Kowloon, Hong Kong 34 China Sourcing Reports

7 SUPPLIER PROFILES Capability Production checklist Cutting machines 20 Die-casting machines 6 Embroidery machines Knitting machines In-house dyeing No Mechanical sewing machines Plastic-injection machines Printing lines Punching machines Weaving looms Popular export models Image file name Jeans rivet Model Minimum order 10,000 pieces Packaging type Carton Delivery time 10 to 14 days Indicated price Exports by product Applique & transfers Buttons & garment hooks 65% Hook-and-loop tape & cord locks Loose trims 32% Tape & ribbons Trims, cord & fringe Zippers & parts 3% Exports by market North America 30% European Union 35% Europe (non-eu) Asia-Pacific 35% Middle East Other Survey Export prices Decreased Export price decrease 5-10% Export sales Decrease Target market European Union Capital expenditure No increase Major challenge Yuan-USD exchange rate Export capability Improve operating efficiency R&D focus Use new/retrofitted equipment Description: Zinc alloy; electroplated nickel finish; 12mm diameter, 2mm thickness Image file name Snap button Model Minimum order 10,000 pieces Packaging type Carton Delivery time 10 to 14 days Indicated price Description: Zinc alloy; electroplated antique brass or cyan finish; 20mm diameter Image file name F5071 Pull tab Model Minimum order Packaging type Delivery time Indicated price F ,000 pieces Carton 10 to 14 days Description: Zinc alloy; electroplated nickel, enameled finish; 44x32x55mm Information not disclosed wwwchinasourcingreportscom 35

8 PRODUCT GALLERY PRODUCT GALLERY Zippers & parts 1 F rhinestone zipper 3 metal zipper D&G (profile page 34) Model: F5071 Minimum order: 10,000 pieces Packaging type: Carton Delivery time: 10 to 14 days Description: Pull tab; zinc alloy; electroplated nickel, enameled finish; 44x32x55mm Hengli (profile page 36) Model: Rhinestone Zipper Minimum order: 500 pieces Packaging type: Buyer-specified Delivery time: 7 to 10 days Description: Plastic zipper; polyester tape; rhinestone trimming; open-, closed-end and two-way versions; in sizes #3, #5, #8, #10; suitable for garments, footwear Hengli (profile page 36) Model: Metal Zipper Minimum order: 500 pieces Packaging type: Buyer-specified Delivery time: 7 to 10 days Description: Brass or aluminum teeth; polyester tape; electroplated golden brass, nickel, nickel-free, or antique brass or silver finish; open-, closed-end and two-way versions; in sizes #3, #4, #5, #8, #19; suitable for garments, bags 4 nylon zipper 5 5#Plastic zipper 6 3#Nylon zipper Hengli (profile page 36) Model: Nylon Zipper Minimum order: 500 pieces Packaging type: Buyer-specified Delivery time: 7 to 10 days Description: Nylon teeth; gold, silver, multicolor finish; in sizes #3, #4, #5, #7, #8, #10; suitable for garments and bags Shenzhen Hua Sheng Da (profile page 46) Model: #5 Plastic Zipper Minimum order: 1,000 pieces Packaging type: Polybag Delivery time: 7 to 15 days Description: POM teeth and parts; polyester tape; electroplated finish; 26in long; waterresistant; suitable for garments; Oeko-Tex Standard 100 Shenzhen Hua Sheng Da (profile page 46) Model: #3 Nylon Zipper Minimum order: 1,000 pieces Packaging type: Polybag Delivery time: 7 to 15 days Description: Two-way zipper; polyester teeth, parts and tape; 20in long; water-resistant; suitable for bags, tents; Oeko-Tex Standard 100 Information not disclosed wwwchinasourcingreportscom 65

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