- Published on Monday, 31 December 2012 17:19
The last installment in this three-part series discusses the challenges faced by makers in the hub.
Underwear and swimwear suppliers in Fujian province are bracing for tough times ahead as internal and external pressures hamper export growth.
Overseas shipments of garments and textiles in 1Q12 climbed roughly 23 percent YoY in terms of value, with sales in the featured line accounting for 20 percent. Profit margins at many companies, however, remained slim.
The revenue increase is generally attributed to higher prices during the period. Most suppliers imposed markups to cover elevated costs. The average monthly wage in Fujian rose from $250 to $280 last year to between $310 and $390. While spending on materials declined, this did not help much in bringing down outlay. Further, makers have to cope with the 40 percent export tax.
For businesses that want their releases to be Oeko-Tex Standard 100-compliant, the updated requirements are going to be another challenge. The International Oeko-Tex Association announced that beginning January 2012, tests for nonylphenols, octylphenol, and nonylphenol and octylphenol ethoxylates are compulsory in obtaining certification. Full implementation is expected by April 1, 2013.
Considered hazardous to the environment, the substances are typically used as surfactants in textile manufacturing processes. They are contained in detergents, industrial cleaners, and dispersants or wetting agents. Under the new conditions, products should not have more than 100ppm of nonylphenol and octylphenol. The limit for total nonylphenol and octylphenol ethoxylates is 1,000ppm.
The additional inspections are anticipated to increase fees by about $625. Delivery may also be delayed as examinations take five to 10 days.
To augment margins, makers are emphasizing upscale models, which yield better gains. Some are improving R&D so they can shift to ODM or OBM, and introduce trendy in-house designs. Instead of sending staff members abroad to attend trade shows, businesses intend to concentrate on domestic events.
Suppliers will continue to target the US and Europe, although demand from these locations has dwindled due to their financial difficulties. A number of exporters intend to supplement revenue by exploring emerging economies.
Click here to read the complete article on Global Sources.
Note: This article "Fujian underwear, swimwear suppliers deal with cost issues, revised standards" was originally published by Global Sources, a leading business-to-business media company and a primary facilitator of trade with China manufacturers and India suppliers, providing essential sourcing information to volume buyers through e-magazines and trade shows
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.
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