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Door handles: Makers step up R&D, sales tactics

To facilitate export recovery, companies are expanding their selections of new products and attending more trade shows.

China's door, window and furniture hardware industry is getting back on track, with suppliers ramping up product development and marketing efforts to achieve 2010 growth targets.

Manufacturers are hopeful of a turnaround largely because demand has started picking up amid recovery in global economies. Orders, in fact, have been rising since June 2009.

Door handle
  The model BS4503 drawer slide from Dayu has a self-closing mechanism and a release latch.

With this, companies that ceased manufacturing during the financial crisis have been able to restore operations gradually. Some are even hiring additional factory personnel to ensure that larger-volume requirements are met.

For most suppliers interviewed in this report, outbound shipments between March and November 2009 increased compared with the same period in 2008. Annual forecasts are pointing to a strong 2010.

Huazhong Industry & Trade Co. Ltd, which posted a 10 percent gain during the nine-month time frame, is optimistic of a 12 percent upturn this year.

Ningbo Lianyongxin Construction Hardware Co. Ltd is anticipating 30 percent growth, while Dayu Metal Products Co. Ltd is pushing for a 20 percent rise. Both saw exports from March to November 2009 jump 30 percent year on year.

Even businesses that have yet to bounce back are upbeat. Although revenue from outbound shipments remained weak in the months leading to November, Dingxin (Ningbo) Metal Alloy Co. Ltd is preparing for a 20 percent boost this 2010.

Keen on accelerating the projected sales rebound, suppliers are launching new products more frequently to rouse interest in the line. In addition, such releases can generate returns as high as 30 percent. Margins for older models reach only 10 percent.

Dayu is among the companies adopting this strategy. Its recent efforts have yielded low-noise drawer slides with a self-closing mechanism.

To optimize profitability, the latest designs are being targeted at Western markets. Products sent there command prices 5 to 15 percent higher than those exported to developing economies.

For instance, drawer slides that measure 1.2x1.2x1.5mm range from $0.60 to $0.70 per inch when shipped to the EU and North America. Asia- and Middle East-bound models of the same specification are $0.30 to $0.50 less expensive.

In another approach, suppliers are actively pursuing new contracts to expand their client base. Most hope to touch base with buyers by increasing participation in major international trade shows.

Companies in Ningbo, Zhejiang province, even receive financial support from the local government. Those that attend the US Hardware Fair in Las Vegas, for example, are given an allowance of $4,390 each.

In-house sales personnel are also doing their share, browsing the web sites of potential clients for design specifications and preferences, and contact details. The team then sends prospects matching product samples to win additional orders.

As part of a more aggressive competitive stance, suppliers intend to preserve their price advantage in the global market. In fact, quotes for China-made models continue to be at least 40 percent lower than those of top foreign brands.

Wary of upsetting resurging demand, many companies plan to keep quotes steady even though certain material costs are on the rise.

Manufacturers still find current outlay manageable, as rates for most metal types remain 10 to 20 percent below 2008 peak levels.

Aluminum alloy increased to $2,300 per ton in August 2009 and cold-rolled steel exceeded $890. The per-ton cost of 45 carbon steel climbed to $640, while stainless steel reached $2,700.

Only spending on copper and zinc alloy has touched peak levels, surpassing $8,000 and $2,600 per ton in early December.

To protect against further losses, businesses are maintaining current price validity periods, which were shortened to less than a month since the economic slowdown.

This article "Door handles: Makers step up R&D, sales tactics" is originally posted in Global Sources.

Note: All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.

Disclaimer: 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. 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.

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