Toys manufacturing in financial crisis
As the global slowdown hit Chinese toymakers, some toymakers really suffered a lot. But business like Ouyang’s in this toy-making hub in Shantou of Guangdong province has been relatively unscathed.
Exports have dropped only very slightly, Ouyang said, about 30% products of her company cater to the domestic market, while 5% aims to Europe and the US, and the rest goes to Southeast Asia.
Shantou may have previously envied its Pearl River Delta cousins for their once-booming original equipment manufacturer (OEM) businesses that depend heavily on overseas clients.
But with global economic gloom shrouding the toy industry in Dongguan, another Guangdong toy-making hub, talk of widespread factory closures and retrenched workers heading back has left many Shantou businesses relieved for not casting their lot with the OEM sector.
Many factories in Shantou are facing hard time, Li said. The decrease of orders has also forced a number of toy factories in Chenghai to send their workers home early this winter.
As one of the three main toy-making bases in Guangdong, Shantou has more than 10,000 factories and about 120,000 workers in Chenghai. Based on the official statistics in the first 10 months, toys accounted for 9.9% of the city’s exports, which was a 33% increase year-on-year.
According to Chen Zhiwei, an official with the Chenghai district information office, many factories in the area have recently reduced or suspended production to minimize losses.
But it is unnecessary to confuse the normal fluctuation of the smaller firms with the direct impact of the global crisis, he added, the reasons that companies go bust could be various. It happens all the time.
Huawei Toys Crafts Co, a 3,000-worker enterprise with a 300-million-yuan ($43.8 million) annual output, also felt the impact of the crisis earlier.
A continuous appreciation of yuan during last month raised export prices. Chinese products involving scandals result in environmental, safety and manufacturing standards. Costs were also driven up by additional tests and certificates required of business.
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