Writing Instruments

China is the world's largest supplier of writing instruments, producing over 23 billion pieces in 2003. Most production is of low-end and midrange products, dominated by ballpoint pens.

With output increasing by 25% a year and manufacturers diversifying into new product types, China is set to continue its dominance of global writing instrument manufacturing.

To help you take advantage of such rapid growth, this report offers profiles of 80 major China suppliers, highlighting production capabilities, QC procedures, R&D resources and more.

You also get an in-depth overview of the industry that examines leading and emerging supply centers, current issues and new trends that will affect sourcing in the months ahead.

What you'll get

In-depth profiles of 15 major writing instrument manufacturers, with a detailed look at their production facilities, export capacities, quality-control procedures and R&D resources

Short profiles of 65 additional suppliers, highlighting key statistics such as production capacities, installed machinery, export volumes, main markets and major OEM customers

A Product Gallery of 155 products categorized by product type — ballpoint pens, gel pens, fountain pens, wooden and mechanical pencils, and highlighters and markers

The results of the latest Global Sources Supplier Survey, that forecast trends in pricing, products, manufacturing and R&D over the coming 12 months

This reports covers: ballpoint pens; gel pens; fountain pens; highlighters, markers and color pens; and wooden and mechanical pencils.

How you'll benefit

Understand the effect of increased competition and rising material costs on FOB prices

Get a ground level view of the different manufacturing, QC and testing procedures used by various suppliers, against which you can compare those of other manufacturers you approach

Obtain insights into suppliers' raw-material sourcing strategies, and how these affect the quality and longevity of the writing instruments you source

Get an overview of Taiwan's writing instrument manufacturing

Executive summary

With a huge supplier base of 3,000 makers employing 150,000 workers, mainland China's writing instrument industry is a dominant force in the global pen-and-pencil industry.

The country's annual output runs to billions of units each year. In 2003, it produced 23.17 billion pieces, of which 57 percent was exported. The China Writing Instrument Association forecasts the growth trend to continue, with output expected to increase by 25 percent in 2004 and by 21 percent in 2005.

Production of writing instruments is largely centered in Zhejiang province, situated on mainland China's southeastern coast. Zhejiang accounts for 70 percent of mainland China's total output and about 59 percent of exports. Other production areas include Shanghai, Guangdong, Jiangsu and Shandong.

Although most makers in mainland China produce a variety of writing instruments, ballpoint pens account for the bulk of both output and exports. In 2003, ballpoint pen exports totaled 5.5 billion units worth US$254 million. The product showed early signs of growth in the first four months of 2004, with export value at US$93.7 million, an increase of 32 percent over exports of US$71 million in the same period of the previous year.

In addition to ballpoint pens and gel pens, the range of products in mainland China includes multifunction pens, mechanical and non-mechanical pencils, fountain and India-ink pens, highlighters and markers, watercolor and roller tip pens, and refills, tips and leads.

Gel pens are a fast-growing category, exhibiting 30 percent growth in 2003. A large number of respondents to a Global Sources survey ranked the product as the most promising export item after ballpoint pens within the next 12 months.

This report includes separate sections on ballpoint pens, fountain pens, gel pens, highlighters and markers, and non-mechanical and mechanical pencils with detailed price guides for each product category.

Most products from mainland China fall into the low-end to midrange categories. High-end products, while available, are not as widely produced in mainland China as in Taiwan, which has an edge in this market. Taiwan, whose exports amount to only about 20 percent of mainland China's, focuses more on midrange to high-end ballpoint pens, mechanical and non-pencils, roller tip pens, gel pens, fountain pens, novelty or promotional pens, as well as pen parts.

Most writing instrument makers prefer to source tips and ink abroad, as the quality of locally made materials is not yet suitable for export items. However, a few suppliers have plans of producing their own inks and tips. Plastic and metal are mostly sourced locally.

Since the production of writing instruments is largely an OEM business, most makers reinvest only a small percentage of revenues — an average of 5 percent — for product research and development.

Industry overview

Mainland China's output of writing instruments is growing at a rate of about 25 percent a year.

In 2003, the output of all writing instruments combined was 23.17 billion pieces with 57 percent exported to stationery and promotional markets in the United States, Europe, Asia, and the Middle East. By the end of 2004, production is expected to reach 29 billion pieces, and close to 35 billion pieces in 2005.

The bulk of mainland China's production of writing instruments is low-end and midrange products targeting the OEM and premiums sectors. The cheapest pens are sold for about US$0.04 each, but high-end pens equipped with music players, money detectors and other electronic novelties are also readily available.

Among all writing instruments, ballpoint pens dominate output, which amounted to 7.4 billion pieces in 2003. Of this, 5.5 billion pieces were exported. Gel pens are the fastest growing category, with production having increased by 30 percent in the past two years, and 3.5 billion pieces exported in 2003.

The mainland is also the leading supplier of wooden pencils having exported 6.08 billion pieces in 2003.

Industry composition
There are an estimated 3,000 suppliers of writing instruments in mainland China, approximately 2,500 of which are specialized makers that dedicate a substantial portion of their production to writing instruments. Most of these companies have in-house plastic-injection molding workshops. The rest are small assembly workshops with writing instruments as a secondary product line. These companies usually do not make plastic parts in-house.

Of the 2,500 specialized suppliers, almost 1,500 are capable of producing ballpoint pens. In fact, a large number of companies started out as suppliers of ballpoint pens or pencils, and later diversified into other categories such as fountain pens, gel pens, and highlighters and markers.

The industry has a long history in mainland China, with a number of companies having been founded in the 1950s and 1960s. The oldest company in this report is Shanghai Fenghwa, a state-owned enterprise set up in 1948 that claims to be the first supplier of ballpoint pens in the mainland.

Most writing instrument suppliers in mainland China are privately owned. There are a few state-owned enterprises and some foreign-invested companies, which are mostly Taiwan or Hong Kong-invested.

Increasing production costs a challenge
Although production and export growth rates of writing instruments from mainland China are impressive, suppliers there face a number of challenges.

The most pressing of these is the increasing cost of production, caused primarily due to spiraling plastic and metal prices. Even some of the large suppliers are finding it difficult to maintain profit margins due to the high cost of raw materials, which are expected to increase further because of rising oil prices.

Samples of supplier profile

Genvana (Guangdong) Stationery Corp. Ltd
Genvana is a large manufacturer of writing instruments, with annual sales valued at US$87.7 million in 2003, of which 60 percent was exported.

Key products are gel pens and ballpoint pens. In 2003, the output of both these pen types combined was 654 million units, of which gel pens accounted for 80 percent or 523 million units. The company also manufactures markers, highlighters, pencils and other stationery.

OEM orders account for 35 percent of the total output. The company also has its own brands, including Genvana, You Win, Know, Toline and See Ple.

Products
The company produces midrange and high-end writing instruments. High-end gel pens from the company are priced at US$0.25, while the midrange ones are from US$0.15 to US$0.20. Its gel pens and correction pens have CE, EN- 713 and ASTM approvals.

GB2828 specifications are followed in sourcing raw materials. Barrels of pens are made of PS, while the grips are of TPR. Tips are of stainless steel and the ball of tungsten carbide. Raw plastic is imported from Bayer of Germany, ink from Germany and Japan, and tips from Switzerland.

Manufacturing
Genvana has 130 people in its R&D team, including 40 experienced designers and 80 assistants. The team intends to launch 200 new designs by the end of 2004.

The company has a 40,000 square-meter five-floor factory in Chaoyang city of Guangdong province, which is about five hours by bus from Guangzhou, and a 30,000 square-meter facility in Shanghai. The Global Sources team visited the Chaoyang factory.

The Chaoyang factory houses 310 plastic-injection machines and ultrasonic welding machines for making pen barrels. Almost all production procedures — from plastic injection to refilling and printing — are done in-house.The barrel, refill and cap of mini gel pens and whiteboard pens are also manufactured in-house.

The Global Sources team saw two custom-made automatic pen assembly machines imported from South Korea and valued at US$120,000 each. Daily output of each machine is up to 120,000 units.

The company has eight automatic refill assembly machines from Global Specialty Machine of South Korea, each of which can produce 200,000 refills per set per day.

Sample of product gallery

Ballpoint pens Amstel Industrial Model: KFCL 2037 Minimum order: 1,000 units Packaging type: Carton Delivery time: 25 days Indicated price: • Description: Brass finish; twist type; 1.0mm ballpoint; logos or designs can be etched on barrel

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