Flatware

China accounts for 55% of the world's flatware production. In 2004, flatware exports amounted to 8.4 billion pieces, valued at US$882 million.

Total output for 2005 is projected to reach 9 billion pieces, roughly 12% higher than 2004. Most of the increase will be for all-stainless steel flatware.

With profiles of 68 suppliers, this report will show you how to identify the manufacturers best prepared to meet your needs in an increasingly fast-changing environment.

Don't get left behind — you'll also benefit from page after page of detailed industry analysis, forecasts of upcoming trends, product comparisons and much more.

What you'll get

Deep profiles of 15 major cookware makers that provide detailed information on manufacturing capabilities, product offerings and future plans. Based on factory tours and personal interviews with senior managers, these profiles are available nowhere else

Profiles of an additional 56 suppliers featuring key information such as machinery installed, export sales, and production, output and export volumes

A Product Gallery highlighting 126 best-selling products with specifications and full-color pictures

The results of Global Sources' latest supplier survey, forecasting price, product, production and R&D trends for the next 12 months

This report covers: stainless steel cookware, aluminum cookware, ceramic cookware, cast-iron cookware and copper cookware

How you'll benefit

Discover the latest flatware designs from China before your competitors do

Use detailed Price Guides in the report as benchmarks when sourcing flatware from China

Identify suppliers that meet your requirements using the easy-to-compare profile tables

Benefit from verified contact details — such as phone numbers and e-mail addresses — for all featured suppliers

Get updates on leading and emerging supply centers, plus insights into capacity, output and other key industry issues

Executive summary

China produces 55 percent of the world's output of flatware. Makers in the country have the capacity to produce a total of 12 billion pieces annually.
In 2004, flatware exports amounted to an estimated 8.4 billion pieces with a value of US$882 million. Manufacturers in China rely heavily on export revenue as local sales account for a mere fraction of their output.

In the past three years, export growth rates have been rising steadily even while the industry is under pressure from rising production costs. In 2003, overseas shipments increased 18 percent in volume and 23 percent in value over the previous year. Exports soared 30 percent in volume and 23 percent in value in 2004. The first quarter of 2005 also recorded a growth in volume of 9 percent and value was up 18 percent relative to the same period in 2004.

The following are some of the trends we see in China's flatware export industry:

• The majority of flatware manufacturers will increase prices in the next 12 months as they continue to deal with rising production costs.

• A large number of suppliers will boost their production capacity as flatware demand continues to rise in main markets including the United States, Germany and the United Kingdom.

• Total flatware output is expected to reach 9 billion pieces in 2005, or about 12 percent higher than the previous year. The greater share of the increase will be for all-stainless steel flatware.

• More companies will upgrade equipment, QC processes and overall manufacturing capability as they continue to focus on OEM markets.

• All-stainless steel flatware will continue to lead flatware exports, although models with plastic handles will remain popular.

This report focuses on all-stainless steel flatware and those with plastic handles, as the two categories combined account for more than 80 percent of total flatware exports from China. Product and pricing information for flatware with wooden handles and silver/gold-plated items are also included.

The Products & Prices section discusses the main types of flatware available from China and factors that determine price. The Manufacturing module provides a thorough account of production processes and testing procedures for raw materials and finished products, while further information on raw materials is given in the Materials & Components section.

The flatware industry in China is estimated to have 300 to 500 suppliers, many of which specialize in flatware. A number of them also offer kitchen tools. Although it is largely composed of small and midsize companies, there are also a few large and well-established makers, some of which have been profiled in this report. Among them is Fujian-based Wingar which has a staggering production capacity of 35 million pieces a month.

Industry overview

The soaring cost of stainless steel has considerably cut profit margins of flatware makers in China, forcing many to consider raising export prices. Although steel prices went down marginally in May 2005, in part due to a new policy in China aimed at regulating the steel industry, flatware makers will nonetheless increase export prices as a number of other factors have also been pushing production costs up. In the next 12 months, buyers can expect flatware prices to go up by about 10 percent.

The rise in stainless steel prices has hit flatware makers in particular since, depending on the type of flatware, the metal can account for 40 to 80 percent of a product's total cost. Over the past two years, the cost of 18/8 stainless steel has doubled while that of 18/0 has risen by 50 to 70 percent.

Early this year, the China government took a series of steps to curb rising steel prices. In an effort to discourage exports and ensure that domestic demand for steel is met, the export tax rebate for billet was abolished, and the duty drawback for steel was reduced from 13 percent to 11 percent. In addition, to regulate the cost of iron ore imported into the country, the government has reduced the number of companies that are qualified to import the material from 500 to 118. Since these companies import almost 90 percent of total iron ore shipped into the country, the sharp decline in the number of importers is not expected to affect domestic supply.

The government's regulations did have some immediate effects in that domestic steel prices were marginally down 6 percent in April 2005 when compared to the same period last year. However, the situation is still volatile and flatware makers will continue to face unpredictable prices.

Even if steel prices do decrease substantially, it is unlikely that flatware makers will reduce export prices, especially since most have been absorbing the higher material costs for more than a year now. Apart from stainless steel costs, there are other factors such as the shortage of labor and erratic power supply that have raised flatware production costs substantially.

Finding and retaining skilled workers is a major challenge faced by flatware makers in China. Many suppliers have had to increase workers' salaries, which account for approximately 10 percent of total operational expenses, to keep them from moving back to the inland provinces where economies are improving. The labor shortage is especially affecting smaller flatware makers, as most of them are unable to provide better benefits for their workers.

The labor-intensive flatware industry requires workers with technical skills for operating machines and performing manual work such as polishing. However, with the labor shortage, many suppliers are forced to hire unskilled workers, who are not as efficient as experienced ones. This can potentially result in delayed deliveries and even affect quality. Power cuts also continue to be a major concern for flatware makers, but the situation has improved marginally since last year. In some provinces, power interruptions can still be as frequent as alternate days. To deal with the situation, many companies have installed generators at their factories. Others carry out production at night since power is usually interrupted only during the day. A few large enterprises are ensured of stable power supply by their local governments.

Samples of supplier profile

Changshu Glory Connection Stainless Steel Products Co. Ltd
Changshu Glory manufactures stainless steel flatware for midrange and high-end markets. Its total annual sales in 2004 amounted to US$4 million. Most of the company's products are shipped to the United States.

Changshu Glory exports through trading companies in Hong Kong and in Guangzhou, Guangdong province.

In line with efforts to increase capacity, it is putting up another factory with two production lines in the near term. It has recently purchased 25 stamping machines and three ultrasonic washing machines.

Products
Changshu Glory produces stainless steel flatware, particularly spoons, forks, butter knives and fruit forks with monobloc stainless steel handles. Each item weighs from 30 to 90g, depending on the length, which ranges from 135 to 215mm.

Flatware sets consisting of 24, 72, 84 and 216 pieces are packed in colored boxes or wooden cases. A 24-piece set is priced at US$5 to US$8.

Products are made of stainless-steel round bars instead of stainless-steel sheets, as bars are relatively cheaper than steel sheets by about US$350 per ton.

About 70 percent of raw materials used are imported, and the rest comes from Jieyang in the southeastern part of Guangdong.

The company allocates US$20,000 or 0.5 percent of annual revenue to R&D. Its seven-member R&D team releases 10 new styles per month. Designs are mostly drawn by hand.

Manufacturing
Changshu Glory's factory has three workshops with two production lines and an administrative building. The ISO-certified company produces 120,000 pieces per month.

Before flatware production, the steel bars are tested for chemical composition using spectral analysis machines. Salt fog tests are also done on material finishes. Approved materials are moved to the preparation workshop for cutting.

Sample of product gallery

All-stainless steel flatware Changshu Glory Model: tp1 Minimum order: 2,000 sets Packaging type: Delivery time: 45 days Indicated price: Description: 18/8 stainless steel; 135 to 210mm long; weighs 35 to 80g per piece

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