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Toys manufacturing in financial crisis

January 16th, 2008

To see part 1

According to Guo Zhuocai, Huawei director and president of the Chenghai Toys Association, the market is to unsteady to be predictable and everything became more expensive.

90% of Huawei’s products, including remote-control toys, electronic dolls and robots are sold to overseas markets.

Although the overall output value of Chenghai’s toy industry rose by almost 20% this year, profits have almost halved, Guo said. However, he added, factory closures in Dongguan will not happen in Chenhai because they have their own brands.

Guo and Shantou entrepreneurs have considered OEM factories as weak ones because it is said that OEMs depend heavily on overseas clients. All the big toy-makers in Chenghai, has been proved to grow up on their own, Guo said.

“From computer-assisted designing and manual molding, to packaging, you name it, we have it,” Guo said.

The dazzling signposts advertising for spare parts like screws and molds lining the streets of Chenghai has become a kind of convenience for manufacturers which has even attracted people from economic powerhouse Shenzhen to start their businesses here, according to Guo.

In order to enlarge his business, Guo decided to venture into the cartoon and animation industry, though he does not see any clear and present danger to his business so far. He has signed a contract with state broadcaster China Central Television.

Guo said that there have been eight Chenghai companies entering the animation market.

Similarly, Auldey Toy Industry, another major toymaker focusing on the domestic market, has transformed and renamed itself Alpha Animation and Culture Co. Only one of its four affiliated companies makes toys. It has even formed a joint venture with the China Film Group.

Chenghai’s largest manufacturer of holiday gifts and ornaments, Quanyu Arts Toys Co, is also aiming to a lucrative future in animation.

As always, Quanyu’s factory suspends production between mid-October and February.

Quanyu deputy general manager Cai Zeliang said orders for Halloween buying season fell 15% from the previous periods. Cai also said at least he does not have to worry about his company because his client is US retail giant Walmart.

Cai was confident with his company this year.

To see part 3

 

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