Hinges

Hinge exports from China amounted to more than US $350 million in 2004, up a robust 27% over the prior year.

The industry continues to expand steadily, with overseas shipments — most of them going to North America — rising 23% in the first five months of 2005.

Which suppliers are best positioned to meet your needs in this growing market? You'll find the answers in this report, as it provides you with profiles of 58 major manufacturers.

Plus, you'll get a detailed industry overview with advance information on new products, price trends, R&D and other issues that will impact your sourcing of hinges in the years ahead.

What you'll get

Deep profiles of 15 major suppliers that offer details on manufacturing capabilities, quality controls, future development plans and more. Based on personal factory tours and interviews with senior managers, this information is available nowhere else

Profile tables of 43 additional manufacturers, with key information such as production capacities, export capabilities, export markets and main machinery installed

A Product Gallery featuring 69 of the most popular export models, with key specifications and full-color pictures

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

This report covers: door/window hinges, cabinet hinges, furniture hinges

How you'll benefit

Use the comprehensive Price Guides as benchmarks to negotiate your best price when dealing with suppliers

Discover how manufacturing process and production equipment differ at small, midsize and large suppliers — and see how those differences impact cost and quality

Find the most profitable OEM partner using this report's production-capability comparison tables

Save time and money by learning the ins and outs of sourcing from the key production hubs of Guangdong, Zhejiang and Jiangsu

Profit from a review of the hinge industry in Taiwan, where most suppliers focus on self-closing hinges

Executive summary

China's hinge industry continues to perform well despite a relatively small supplier base of about 100 volume makers. Exports in 2004 exceeded US$350 million, growing 27 percent from 2003 shipments. The industry is on track for another good year as shipments for January to May 2005 have risen 23 percent from the same period in 2004.

Some of the key trends we see emerging in China's hinge exports include:

• Price increases in the next 12 months are inevitable given the overall high and still fluctuating costs of raw materials. There are several suppliers in China, however, trying to keep quotes at current levels by adopting cost reduction measures.

• Exports for the rest of the year will continue to register high double-digit growth rates as improved designs and product quality compensate for upward adjustments in prices.

• Suppliers will be increasing capacity in the coming year to prepare for larger export orders. Investments will focus on the purchase of additional equipment or upgrades of existing production lines.

• R&D efforts will focus on product aesthetics and performance and the actual manufacturing process. To improve aesthetics, suppliers will expand the use of finials for a more decorative look. Surface treatments will focus on higher resistance to wear and corrosion to enhance hinge service life. Many suppliers will be replacing simple machines with advanced equipment that will minimize wastage.

This report focuses on door, window, cabinet and furniture hinges. These are usually made of steel, the type or grade of which is a strong determinant of the positioning of the product. China-made hinges are usually plated although upscale models adopt a coating that is more resistant to corrosion. The key attributes of hinges from China and their price ranges are further detailed in the Products & Prices section of this report.

Suppliers source the majority of key raw materials domestically. There are however, some makers that find importing a portion of the materials more cost-efficient. These sourcing strategies and other efforts to reduce materials spending are discussed in the Materials & Components section.

The heavy dependence on OEM/ODM customers to dictate design trends has severely limited in-house R&D efforts. But, as discussed in the R&D/Design section, the task has become vital for a growing number of China suppliers keen on moving upscale.

This report profiles several key hinge suppliers in China, including Foshan City Shunde Leliu Town Adams, which is a specialist in the product and the first in China to make hydraulic hinges. Foshan Shunde SACA is another large hinge maker in China with monthly output of 7 million units. The maker has been using manufacturing technology from the US since its establishment more than a decade ago. Joint-venture Gotin produced 72 million steel hinges in 2004 and is known as the top supplier of steel hinges in China. Guangdong Dongtai Metal, on the other hand, is one of the biggest makers of concealed hinges in Asia, producing 25 million units every month.

Industry overview

China's hinge industry rode out the difficulties that plagued it in 2004 to ship US$354.9 million worth of the product, considerably higher than the US$278.9 million recorded in 2003. Export volume reached 173.9 million kilograms in 2004 from 129.2 million kilograms the previous year.

The 27 and 35 percent increases in 2004 export value and volume, respectively, are significant given the fierce price competition and soaring raw material costs that marked the year.

As with other general hardware product lines in China, the hinges industry consists mostly of small makers — in this case, about 80 percent of the supplier base. Companies with midsize operations make up 15 percent of suppliers while only about 5 percent are large makers.

There also exists a fourth and larger category of suppliers, which are backyard operations and often referred to in the industry as "fourth-tier" makers. These companies use substandard raw materials and the most basic machinery and implement slipshod manufacturing processes to offer astonishingly low prices. QC/QA practices are virtually nonexistent at these factories and suppliers make very minimal investments in factory space, automatic machinery, skilled labor and R&D.

These backyard operations ship their products via trading companies mainly to low-end markets such as Africa. However, they have still disrupted the hinge export industry in China by offering prices 50 to 70 percent lower than quotes even of small makers. Unable to engage in direct price competition, many established hinge makers have been forced to shift to related but more profitable product lines. Some have even shut down operations altogether.

Rising raw material costs continue to trouble both established hinge suppliers and backyard operations. In the first five months of 2005 alone, the cost of cold-rolled and stainless steel has already increased 8 to 12 percent.

Backyard operations are particularly vulnerable to cost increases since the very low prices they offer hardly give them room for profit margins. The rising cost of raw materials is eroding into what little profit margin is left and has driven several makers out of the industry. Minimal sunk cost, however, makes it easy for backyard operations to pull out of the industry and reenter it when the cost situation stabilizes.

Established suppliers with substantial investments to protect are forced to cope with high material costs. One of the ways they are doing this is by changing sourcing strategies. After the cost of cold-rolled steel rose from US$776 per ton in January to US$873 per ton in May this year, some large makers of cabinet hinges started sourcing the material domestically. To maintain high product quality, procurement is limited to top suppliers of the material.

Door-hinge suppliers are using less expensive materials such as 301 stainless steel, which costs about 12 percent less than 304 stainless steel. Brass with a 52 percent copper content is another option. This material sells for about US$2,657 per ton compared with brass that has 57 percent copper but is US$2,778 a ton.

To reduce other manufacturing expenses, some China makers are also improving the production process with the use of automatic machinery and combining some key steps such as punching and drilling. Automation, however, is limited to some critical processes as suppliers are still keen on maximizing the abundance of low-cost labor in China.

Despite all the challenges, signs point to 2005 as another strong year for hinge exports. Outbound shipments from January to May have already reached US$166.9 million, 23 percent higher than exports during the same period in 2004. Suppliers are confident that growth rates will continue to remain at high double-digit levels as efforts to upgrade product quality off with increased orders.

A growing number of makers are improving their hinges' functional and decorative aspects to boost exports of higher-end products.

Samples of supplier profile

ACRO Metal Products Ltd
ACRO began as a trading company in 1984 and started producing metal products only in 2001. Aside from hinges, the company now also offers stamped, formed and cast metal parts, wire formings and machined components. Total sales of all products amounted to US$10 million in 2004, with hinges accounting for 20 percent.

The maker produces high-end hinges, which it claims are 10 percent cheaper than products of the same quality offered by other suppliers. Running at 50 percent of installed capacity, it manufactures 150,000 hinges a month, all of which are shipped overseas. All exports are under OEM contracts to clients in the US and the EU.

ACRO is in the process of constructing a US$6-million 50,000sqm facility in Jiaxing, Zhejiang province. To be operational by the end of 2005, the new factory will double the current capacity. The company will also hire more than 60 workers and purchase additional metalworking and testing equipment in coming months.

Products
Both residential and industrial hinges are offered. Residential hinges include those for doors, windows and furniture, while industrial products are for automobile doors and windows, and electrical equipment.

Prices range from US$0.80 to US$15, depending on the material used, processing technique and surface treatment.

Industrial hinges are made of steel and cold-rolled stainless steel, which are more durable than hot-rolled stainless steel. Residential products are typically made of steel and hot-rolled stainless steel.

Raw materials are sourced from domestic suppliers. The company offers various surface treatments including electroplating and powder coating.

Sample of product gallery

Door/window hinges ACRO Model: MVC-241S Minimum order: 2,000 units Packaging type: Carton Delivery time: 30 days Indicated price: US$0.62 Description: European-style steel model; dull chrome finish; measures 3.5x3.5 inches

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