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Upgrading systems, automation, and reducing waste are manufacturers’ key goals

SINGAPORE - 03/22/06 - A recent survey has concluded that more than six out of every ten manufacturers in China plan to increase their export prices between 5% and 10% within the next 12 months.

More than 1,300 Chinese manufacturers across the country were queried to develop the China Supplier Survey conducted by Singapore-based marketing consultancy Global Sources.

"Labor and power supply shortages, which were the primary concerns a year ago, are being better managed by suppliers," said the survey's editor, Michael Kleist.

Intensifying price competition and rising raw materials cost, "are now the major challenges facing [Chinese] manufacturers."

That combination, he said, "is why most companies plan to increase prices in the coming months," adding that many mainland China manufacturers are working to increase efficiency "in an effort to improve profit margins."

According to the survey, some 44% of the companies are upgrading management systems; 24% are automating key production processes; and 14% are focused on reducing waste
and decreasing defects.

In addition, despite manufacturing challenges, nearly six out of 10 of the companies surveyed expect export sales to increase by 10% or more over the next year with more than half of those forecasting increases of over 20%.

Ninety-nine percent of the companies, it found, expect at least a small increase in export sales.

The majority of manufacturers anticipate sales growth to come from exports to either the European Union (EU) or the US, Canada, or Mexico.

Forty-five percent of the surveyed companies said the EU was their primary export market, while 32% indicated North America as their overseas market of choice.

"Many suppliers feel that profit margins in the EU are better than in the US," said Kleist.

The EU, he said, "is seen as having more disparate distribution channels and more independent retailers and wholesalers. The US, on the other hand, is dominated by large retail chains capable of putting more price pressure on suppliers."

Global Sources is a business-to-business (B2B) media company and a facilitator of two-way trade with Greater China

The company delivers information on 1.4 million products and more than 130,000 suppliers annually through 10 leading online marketplaces and monthly magazines, more than 100 sourcing research reports, and 14 China Sourcing Fairs and other trade shows.

The survey is available at www.globalsources.com/gsti/csrcpsurvey

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