17 December 2009

China Suppliers Ready For Uptick In Housing And Construction Market

Global Sources

Durable materials help makers integrate natural stone trays, decorative prints and other add-ons.

More China suppliers of shower enclosures will be looking to resume their foray into the upper market segments on the back of improving economic sentiment across domestic and overseas destinations.

Companies, in fact, are already expanding their midrange selections. This line promises the fastest export growth, with its share in the country's entire output rising from 40 percent a year ago to about 50 percent in the past six months.

To carry out this upmarket shift, the majority of makers will install value-added features such as massage and shower functions in future releases.

Accessories are likewise being produced from superior and durable materials, including built-in trays that may be fabricated from natural stone rather than acrylic. For this case, marble is the material likely to become popular in the next three to five years.

Decorative prints and graphics are being inserted between glass sheets as well. This ornamental layout is commonly available in the high-end line where the panels can be as thick as 10mm.

To speed up recovery, most manufacturers are also looking to establish new routes abroad as both the EU and the US, despite being China's biggest markets, have become relatively saturated.

In the second half of 2009, companies redirected shipments of low-end and midrange products to Eastern Europe, South America and North Africa. Foshan Korra Bath Ware Co. Ltd's exports to Eastern Europe have 4mm tempered glass panels while those for the EU are 2 to 4mm thicker.

China suppliers offer mainly semiframed and framed models, with each line accounting for approximately 40 percent of the country's total output. Frameless variants, which gained popularity during the economic crisis when manufacturing inputs were costly, constitute the rest.

Going for $60 to $100 each, low-end designs use tempered glass with a thickness of 4 to 6mm. Their metal components are aluminum or stainless steel coated with chrome.

Midrange models are priced at $101 to $150 and come with 6 to 8mm-thick tempered glass. Frames are made of chrome-plated steel or copper. The built-in trays are of acrylic.

At $151 to $200 each, high-end variants adopt 8 to 10mm tempered glass and copper frames with a nickel or chrome finish. The trays are constructed from acrylic or marble.

Materials for bath and shower enclosures are typically procured from domestic suppliers, but these can also be ordered overseas. Most fixtures are compliant with international standards.

Makers generally adjust their prices according to manufacturing input costs. In the next six months, most will offer stable quotes as material rates are expected to remain close to current levels. Copper rose from $1.80 in March to about $2.70 per pound in September 2009. During the same period, aluminum went up from $0.64 to $0.81 a pound.

China is home to more than 400 suppliers of shower enclosures and cubicles. Over 80 percent of enterprises are privately owned, most of which have small or midsize operations. Small suppliers ship less than $10 million worth of products annually to overseas destinations. They have fewer than 200 workers and R&D departments with eight members at most.

Midsize companies send abroad $10 million to $15 million worth of shower enclosures each year. Many have workforces numbering 200 to 500, including 10 to 20 in product development.

With annual export revenues exceeding $15 million, large makers employ more than 500 personnel. Their R&D teams are made up of at least 20 engineers.

Over 90 percent of China's supplier base offers related products such as sauna rooms and bathtubs.

Some manufacturers provide fixtures, including showerheads and panels. Those near ceramic hubs turn out toilets, sinks and other sanitaryware.

With vast sources of raw materials and support factories, the provinces of Guangdong and Zhejiang stand out as the key manufacturing centers. The former accounts for 70 percent of the country's output and ships mainly midrange and high-end models. Well-known international suppliers are also based there.

With relatively lower production outlay, companies in Zhejiang can offer designs that are more affordable than Guangdong's.

Zhongshan is the center of Guangdong province's shower enclosure industry and is recognized as such by the China Hardware Association. The city is home to roughly 110 suppliers, 90 percent of which are manufacturers.

Some of the well-known companies in the area are Zhongshan Ally and Zhongshan City Shali.

The proximity of the hub to Hong Kong and Macau continues to benefit the local industry, allowing makers to account for almost one-third of mainland China's overall exports.

Midrange and high-end designs comprise the bulk of the base's shipments.

To foster growth, leading makers there have set up research centers that focus on advancing new designs. The local government complements this initiative by assisting companies in applying for patents.

Note: All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.

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