Competitive pricing becomes difficult as production expenses increase.
Still suffering from the effects of a weak export market, China's applique and transfer industry faces more challenges in the months ahead as manufacturing outlay increases.
Between January and November 2009, the country shipped out 10.7 million kilograms of woven emblems and labels worth $101.5 million. Although volume was up 1 percent YoY, value declined by 6 percent.
Suppliers are trying to maintain prices at low levels under efforts to attract orders, but this is becoming difficult because manufacturing outlay is getting higher.
China's National Development and Reform Commission announced that effective Nov. 20, 2009, an average of 0.028 yuan per kilowatt-hour will be augmented to the rate of industrial-use electricity. Operating expenses for most companies rose as a result.
The synthetic fiber sector, for instance, has to shell out at least $64.4 million to cover the additional charges, sacrificing about 7 percent of its profits. Consequently, quotes for products under this industry need to be increased by about $32.90 per ton.
The cost of major materials utilized by applique and transfer makers is going up as well. Polyester yarn is 10 to 15 percent more expensive now than a year before.
In spite of difficulties, most companies remain optimistic that the export situation will improve gradually. Many businesses, meanwhile, are taking the opportunity to expand market presence and upgrade their latest releases. The latter strategy helps widen profit margins as such models have higher quotes.
Manufacturers are also enhancing efficiency and productivity by updating management systems. For example, ERP systems are now employed in operations.
To reduce wastage and defect rates, staff training is continuously provided. Further, suppliers are hiring workers with more than two years of experience in the industry.
Such team members are able to predict the effect of using different types of thread, needle and padding. A few can troubleshoot minor machinery problems.
In addition, skilled employees have the knowledge to make critical design decisions that diminish material consumption and heighten efficiency.
Measures on decreasing outlay are being implemented as well. Energy-saving bulbs and automatic faucets are utilized to cut down electricity and water consumption.
Products & prices
Ranging from $0.03 to $4, China-made applique and transfers come in hot-fix, printed, woven and embroidered types. Under the last category, models with a synthetic fiber base are dominating output and exports. They are about 20 percent less expensive than labels or emblems that have a cotton, silk or other natural fiber bottom.
Prices depend on the materials, cutting method, and design-impression or needlework technique adopted. The number of yarn colors and stitches affect quotes as well.
Hot-fix motifs often adopt domestic and Czech Republic-sourced rhinestones, zircons, sequins, nailheads, and resin, glass, acrylic and aluminum beads. More expensive versions feature Swarovski crystals.
Silk-screening and heat transfer are commonly employed for printed releases. Among midrange and high-end variants, dye sublimation is popular because it yields more realistic patterns.
In the said process, solid dyes are embedded in a roll of transparent film. The printer head heats up as it passes over the sheet, causing the pigments to vaporize and permeate the surface of the target object before returning to their original form. Since the colors are fused onto the exterior, these can withstand fading and distortion over time.
Labels and emblems are impressed on canvas, T/C, cotton, twill and polyester. Those made using dye sublimation are roughly 20 percent costlier than silk-screened varieties.
Embroidered applique generally range from $0.11 to $0.18 per piece, increasing every 10,000 stitches. Chenille and 3D versions, however, can go as high as $0.44.
Manual and electronic embroidery machines are utilized in producing the former. Moss stitches provide depth to the figure, while chain stitches are adopted for outlining. Various thread and needle sizes are employed to create diverse appearances.
The 3D effect is achieved by doubling the stitch count on the motif or utilizing urethane foam. This makes the design thicker, giving a raised appearance to the garment.
Models that have merrowed borders are $0.03 to $0.15 more expensive than those without edging.
Recently, a number of companies have started utilizing discharge printing, burnout, reverse embroidery, and laser cutting and etching in creating applique and transfers. The techniques are normally used to apply patterns directly onto garments and fabrics.
Locally owned private enterprises account for about 95 percent of mainland China's applique and transfer supplier base. Businesses with Hong Kong, Taiwan or other outside investment constitute the rest.
About 70 percent of exporters are trading companies. They can have as many as 100 employees, and offer garments and fashion accessories in addition to trimming.
The majority of manufacturers are engaged in small operations. Thirty percent consists of midsize and large factories.
Small plants occupy an area of about 10,000sqm. With a workforce not exceeding 300, they concentrate on low-end designs and often generate only 1 or 2 percent profit.
Midsize makers can have up to 1,000 personnel. They usually focus on a specific type of applique.
Weaving, embroidery, printing, cutting, overlocking, iron-on backing attachment and packaging are done in-house, although some prefer farming out a few of these processes to local specialists.
Companies with as many as 4,000 employees are considered large. Businesses of this size set up different workshops for metal, plastic and fabric badges, labels and tags. Advanced equipment, including computerized machines from Japan's Tajima and Barudan, are utilized.
In most factories, manufacturing begins after samples are approved. The base fabric is mounted on the embroidery machine and the design is executed. The pieces are then cut into the correct shape.
Heat-cutting equipment can be used to prevent the edges from unraveling. The application of adhesive backing is the final step before packing.
To ensure quality, workers perform visual and tactile inspections. They check the stitches, colors and overall image registration according to the approved sample.
Products are also examined for dirt and adhesive failure. Those that do not meet requirements are discarded or returned to the factories for correction.
Suppliers of applique and transfers in China are mostly based in Guangdong and Zhejiang provinces. In the former, Dongguan is the major producer of embroidered trimming. The local industry benefits from the city's abundance of skilled labor, and material, equipment and service providers.
Polyester and cotton yarn and thread, and mechanical and automatic embroidery machines are easily procured from factories within the area. In addition, dyeing and printing can be subcontracted to specialist mills without much difficulty.
Further, Dongguan is located in the middle of the Guangzhou-Shenzhen economic corridor, providing a fast and convenient transportation network favorable for the development of supply chains. It is also home to a large number of garment makers, which purchase applique and other trimming domestically.
Yiwu in Zhejiang is a hub for hot-fix motifs. Buttons, zippers, and related items such as rhinestones and fashion jewelry are widely available in the city as well. Products there are priced 20 to 30 percent lower than those from Guangdong.
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