Power Hand Tools. Essential sourcing intelligence for buyers

Transcription

1 Essential sourcing intelligence for buyers China manufacturer profiles Detailed profiles of 51 suppliers, including findings from in-person tours of 12 factories Jiangsu Zhejiang Shanghai Product & price trends Prices and specifications of 100 top-selling export products June 2007 US$445 Guangdong Power hand tool supply centers Supply centers & market trends Coverage of leading and emerging supply centers, plus insight into capacity, output and R&D

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3 EXECUTIVE SUMMARY POWER HAND TOOLS Supplier capability in China Executive Summary Since 2005, China s power hand tool shipments have continually topped $3 billion, climbing an average of 17 percent annually in terms of value. Export sales neared $3.8 billion in 2006, up 19 percent from the previous year. Customs statistics from January to April indicate that the double-digit growth will continue in If the 26 percent increase experienced during this period is sustained, export value could exceed $4 billion by the end of the year. The growth is attributed mainly to the higher prices of products shipped overseas rather than to major changes in export volume. Most suppliers raised their quotes 10 to 15 percent in 2006 and during the early months of 2007 to cover the soaring cost of key raw materials such as copper and nickel. Due to intense price competition, especially in the DIY sector, makers are focused on increasing export volume to maximize profits in coming months. As a result, they will strive to maintain current prices or at least limit further increases to boost the quantity of tools sold. The following are some of the other major trends we see in China s power hand tools industry: Most suppliers are optimistic they will be able to keep additional price increases within 10 percent, since raw material costs have slowed their upward trend. The cost of copper, for example, rose by only 40 percent in the first four months of 2007 after doubling last year. Makers will streamline operations to generate additional savings and maintain competitive prices. Greater investment in advanced machinery and management systems is therefore expected. More environment-friendly designs will be released to increase sales to industrialized markets. Improvements on tool aesthetics, efficiency, service life, durability and ergonomics also will continue. North America and the EU, which currently absorb more than 70 percent of China s shipments overseas, will continue to be the main markets for power hand tools. Nonetheless, exports to Eastern Europe, the Middle East and Asia are expected to rise as stricter product standards force makers to reduce their dependence on the two traditional markets. This report covers the four major categories of China-made power hand tools: drills and routers, saws, sanders, planers and grinders, and fastening tools. Product descriptions and factors related to quality and market positioning are discussed in the Products & Prices section. An overview of the major production processes, which for most makers focus on assembly, QC and packaging, is presented in the Manufacturing section of the report. The composition of the supplier base and the key characteristics and capability of small, midsize and large makers are covered in the Industry Overview. An analysis of the key issues and trends affecting suppliers is also provided in the section. To reflect the industry structure, a mix of locally owned companies, state-owned enterprises, and Hong Kong- and foreign-invested ventures were interviewed for this report. More than 70 percent of these are makers with direct-export capability, while the rest are trading companies or manufacturers that ship their products through third-party agents. Seventy-eight percent of the companies are located in the provinces of Zhejiang, Jiangsu and Guangdong, China s top production hubs. Zhejiang and Jiangsu each have about 600 makers, while Guangdong has more than 300 suppliers. In this report 12 in-depth company profiles 39 short company profiles 100 top-selling export products Supplier demographics Supplier survey Industry statistics and 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 that may or may not be clients of Global Sources. The selection of suppliers is designed to reflect closely the composition of the industry in China in terms of geographic spread, business type and company ownership. For in-depth profiles, our research teams visited the manufacturing facilities of each company and interviewed senior executives who discussed their recent performance and provided forecasts for the next 12 months. All other companies in this report were either visited or contacted by phone. In each case, companies were required to answer specific questions designed to verify their manufacturing and export credentials, including a breakdown of exports by product type and market. 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. The survey was carried out during phone interviews and in-person factory visits. All survey questions are single choice. Results were calculated based on the actual number of valid responses to each question

4 CONTENTS CONTENTS INDUSTRY OVERVIEW... 6 Supplier summary OEM/ODM partners Export statistics Main production centers Suppliers by location PRODUCTS & PRICES... 9 Production & exports Price guides Top exporters MANUFACTURING Capacity utilization SUPPLIER SURVEY Export prices, export sales, major challenges, target markets, capacity expansion plans, product trends, capability SUPPLIER PROFILES Supplier locations Industry composition Top 20 exporters Supplier matrix Production checklist Supplier profiles PRODUCT GALLERY Top-selling export products SUPPLIER CONTACT DETAILS Copyright 2007 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) P.O. 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 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). China Sourcing Reports

5 InDUSTRY Overview INDUSTRY OVERVIEW China s power hand tools industry is an exporting powerhouse. Annual sales from overseas shipments have surpassed $3 billion since Customs statistics indicate that double-digit growth will continue in The $1.4 billion value of exports during the first four months of the year is already 26 percent higher than shipments during the same period in The growth, however, is not caused by any significant increase in volume. In fact, many companies believe the line has reached maturity, especially since the number of products sent abroad has gone up less than 10 percent during the past two years. From January to April 2007, export volume rose only 5 percent from the same period in In reality, higher product prices are driving export sales. According to customs data, the per-unit-value of power hand tools that China shipped overseas in the same four-month period jumped 20 percent, double the increase in Soaring raw material costs during this time frame forced many makers to raise prices. Tight supply brought up copper costs nearly 40 percent from end-2006 levels to approximately $9,000 per ton in May Meanwhile, the cost of nickel, used for the batteries of cordless models, jumped from $21,000 per ton in 2005 to $54,000. Due to the highly competitive nature of the industry, particularly in the DIY segment, boosting export volume is the primary way to earn larger profits. Most suppliers currently obtain margins that are only between 5 and 10 percent of export sales, and they are keen on securing more frequent and substantial orders. To achieve this objective, many companies will keep their quotes stable in coming months. These suppliers are confident they will be able to limit any price increase within 10 percent since the shortage of key raw materials is expected to ease, resulting in minimal cost fluctuations. Adjustments in copper costs, for example, are currently not as high as those in As part of efforts to maintain their price advantage, makers are investing in more efficient production lines to generate additional cost savings. Many tool manufacturers are purchasing equipment domestically since local suppliers now offer less expensive systems that match the capability of imported models. These suppliers also provide more convenient and immediate after-sales service, which minimizes lags in production. Greener models Suppliers in China are releasing more environment-friendly models to increase sales to industrialized markets, particularly those in North America and western Europe. Power hand tool requirements have become more stringent in these regions because of growing concerns about the impact of electrical equipment on the environment. Specifically, companies exporting to the US and EU have to follow legislation such as the RoHS directive that restricts the levels of harmful OEM/ODM partners Company Kinpow LSM Lumex Ningbo Hongtai Shanghai HS Sun-Moon Top Electrical Wuxi Xinju Zhejiang Rongpeng Zhejiang Yida Zhejiang Yongkang Jinmei Zhejiang Zhongtai Data: All surveyed suppliers Supplier summary Suppliers surveyed 51 Export sales $745.5mn Export ratio 81% OEM business 65% Capacity utilized 73% Annual R&D spending $27.8mn Full-time employees 28,429 Data: All surveyed suppliers substances, including lead, cadmium, mercury and hexavalent chromium in a product. Since RoHS went into effect in 2006, domestic suppliers of materials and components have made compliant versions while tool makers have adjusted their procurement systems and production lines in order to provide approved models. In the cordless segment, compliance with environmental standards has pushed many companies to equip their tools with batteries containing less lead, mercury and cadmium. Consequently, the share of models using NiMH and Li-ion types is increasing, although NiCd batteries are still the mainstream choice. NiCd units are currently used in approximately half of cordless tools, while NiMH and Li-ion batteries are used in 40 and 10 percent, respectively. Suppliers, however, expect Li-ion Major OEM/ODM/OBM customers OBI, Metro (Germany), B&Q (UK), Sears (US) OBI (Germany) Outiror, Carrefour (France), Meister, Metro (Germany) B&Q (UK), Carrefour (France) Einhell, OBI (Germany), Kingfisher, B&Q (UK) Hitachi (Japan) Meijer (US), B&Q (UK) OBI, Meister, Metro, Mannesmann (Germany), Carrefour (France) Metro (Germany), B&Q (UK), Wal-Mart (US) Ryobi (Japan), OBI, Meister (Germany), B&Q (US) OBI (Germany), Kingfisher, Home Depot (UK) Pevec Zagreb Doo (Croatia), SBM Group (Russia) 6 China Sourcing Reports

6 Supplier profiles Kinpow Industry Co. Ltd Although Kinpow is a trading company with more than 60 employees managing export sales, it also has a manufacturing arm for DIY power hand tools. Products meet CE, GS, BS, UL, EMC, LCIE, ETL, LOM and UTC standards. About 30 models are patented. The company applies for 10 design and five function patents every year. The trading division obtains customer information and feedback for market research. It also helps clients source products that the company does not make from partner factories such as the Jinding Group in Jiangsu province, and Hengyou Electronic and Dongli Electric in Zhejiang. In-house QC engineers supervise the production of outsourced tools. The company plans to promote the in-house Kinpow brand, which currently accounts for 32 percent of exports and is now sold in 37 countries. Capability Production checklist Assembly lines 25 R&D/design staff 24 QC staff 33 Makes molds in-house Yes Makes motors in-house Yes Automated wire-winding machines 50 Balancing machines 50 Aging lines 25 Exports by product Drills & routers 45% Saws 20% Sanders, planers & grinders 30% Fastening tools 5% Exports by market United States 7% European Union 82% Europe (non-eu) Middle East/Africa 4% Asia 2% Other 5% Outlook Export prices Increase 5-10% Export sales Increase 10-20% Production capacity Increase up to 20% Expansion plan Upgrade existing facilities Main target market European Union Hot product trend Increased durability & reliability Major challenge Raw material costs Efficiency improvement Upgrade management systems Capability improvement Shorten design & development lead time Products Rotary and impact drills, including cordless types, make up 30 percent of output at Kinpow. Grinders and sanders account for 30 percent, while saws and drill hammers represent 20 and 15 percent, respectively. The rest consists mainly of outsourced products such as pneumatic fastening tools. Impact drills and angle grinders are priced from $5 to $9. Drill hammers are between $20 and $35, while cordless drills are from $8 to $35. The 24-member R&D team collaborates with a design company in Germany. Twenty to 30 new products are released annually. Kinpow purchases electric wire, plugs and transformers from Ningbo, while chargers and motors for cordless tools are sourced from Wenzhou or Yongkang. Plastic such as ABS is usually from Yuyao, although it can be purchased from other suppliers such as the Ningbo plant of South Korea company LG. Profile Company facts Year established 1990 Head office location Ningbo (Zhejiang) Business type Trading company Ownership Mainland China-owned Factory location(s) Ningbo (Zhejiang) Total factory area 150,000sqm Full-time employees 3,500 Total annual sales (all products) $107.0mn Annual R&D spending $2.00mn ISO certified Yes Sales & output: Power hand tools Annual sales $105.0mn Share of total sales 100% Annual export sales $105.0mn Total monthly capacity 1,200,000 units Average monthly output 900,000 units Capacity utilized 75% Average monthly exports 900,000 units Export ratio 100% OEM % of exports 35% ODM % of exports 33% OBM % of exports 32% Major OEM/ODM/OBM customers OBI, Metro (Germany), B&Q (UK), Sears (US) 26 China Sourcing Reports

7 Supplier profiles Besides power tools, Kinpow also produces water pumps and garden implements. Manufacturing Kinpow makes the motors for its electrical tools in its Ningbo factory, which has workshops for plastic injection, machining, paint spraying and assembly. The motor workshop has 50 winding lines, 25 for rotor production and the other 25 for stator manufacture. The motors are tested on automated balancing machines from Japan. A total of 70 plastic-injection machines are housed in three other workshops. Another area in the facility has six CNC machining centers and a hundred other equipment, including lathes, planers and milling, grinding and polishing machines. The paint-spraying workshop has three lines. Three workshops house 25 lines for assembly and aging. Each assembly line has two QC personnel testing voltage, electric current, power and speed. Products are also checked for durability, temperature and continuous operating time. Popular export models Image file name KPID1103.jpg Drill & router Model Minimum order Packaging type Delivery time Indicated price KPID units Blow-molded case 30 days Description: Impact drill; 1,000W input power; 0 to 8,000rpm no-load speed; 2 to 16mm chuck capacity; 13mm (steel), 16mm (wood), 32mm (concrete) drilling capacity Image file name KSTCS1211.jpg Saw Model Minimum order Packaging type Delivery time Indicated price KSTCS units Blow-molded case 30 days Description: In-line saw; 1,200/1,400W input power; 4,500rpm no-load speed Contact details Business contact YUAN Jiming Phone (86-574) Fax (86-574) manager@kinpow.com kinpow@globalsources.com URL Address 26F, Century Plaza, 118 Daliang Street, Ningbo, Zhejiang, China Image file name KPAG0508.jpg Sander, planer & grinder Model Minimum order Packaging type Delivery time Indicated price KPAG units Blow-molded case 30 days Description: Electrical sander; 500/580/650/710W input power; 11,000rpm no-load speed; 100/115/125mm disc diameter; M10/M14/M14 spindle thread Information not disclosed 27

8 PRODUCT GALLERY PRODUCT GALLERY Drills & routers Image file name: DP-5706.jpg Image file name: WSD0206.jpg Image file name: jpg Dino-power (profile page 52) Model: DP-5706 Minimum order: 100 units Packaging type: Colored box Delivery time: 25 days Indicated price: Description: Impact drill; 1,700rpm no-load speed; aluminum housing; plated finish; CE Dongguan Wisdom (profile page 53) Model: WSD0206 Minimum order: 1,000 units Packaging type: Colored box/ blow-molded case Delivery time: 30 days Indicated price: Description: Cordless drill; 1.2A NiCd battery; RS550 motor; 9.6/12/14.4/16.8/18/19.2/ 24V; 550rpm no-load speed (single-speed gearbox) or 1,200/3,500rpm (two-speed gearbox); 24 torque settings; forward/reverse switch Fartools (profile page 53) Model: Minimum order: 500 units Packaging type: Carton Delivery time: 40 days Indicated price: $42.00 Description: Rotary hammer drill; 1,000W input power; 1,100rpm no-load speed; plastic housing; soft-touch, rubber finish Image file name: J1Z-MY01-06.jpg Image file name: J1Z-YD2-13C.jpg Image file name: HPW jpg Fuzhou The Yong Chang Sheng (profile page 54) Model: J1Z-MY01-06 Minimum order: 250 units Packaging type: Carton Delivery time: 25 days Indicated price: $15.00 Description: Impact drill; 220V at 50/60Hz; 240W input power; 6.5mm maximum drilling capacity; 4,500rpm no-load speed Guangdong Power (profile page 55) Model: J1Z-YD2-13C Minimum order: 1,000 units Packaging type: Carton Delivery time: 45 days Indicated price: $18.70 Description: Impact drill; 220V at 50Hz; 440W input power; 770rpm no-load speed; 13mm maximum drilling capacity Hanpoway (profile page 56) Model: HPW Minimum order: 3,000 units Packaging type: Blow-molded case Delivery time: 35 days Indicated price: $16.00 Description: Cordless drill; 0 to 550rpm no-load speed; 16 torque settings; 5 to 7 hours charging time; 1 to 10mm chuck capacity; UL Information not disclosed 70 China Sourcing Reports

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