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INDUSTRY OVERVIEW
China's economic output is increasingly concentrated on three regions: The Yangtze River Delta, Pearl River Delta, and the Beijing-Tianjin Bohai Bay Triangle. Knowledge on the three regions is important for foreigners doing business in China.
2.2.1. Yangtze River Delta Region
2.2.1.1. General Background The Yangtze River Delta (YRD) metropolitan region refers to 16 cities in Shanghai, southern Jiangsu, eastern and northern Zhejiang, including Shanghai, Nanjing, Suzhou, Wuxi, Changzhou, Yangzhou, Zhenjiang, Nantong, Taizhou, Hangzhou, Ningbo, Huzhou, Jiaxing, Shaoxing, Zhoushan and Taizhou.
Yangtze River Delta
YRD covers an area of 100,201(sq.km), only 1% of China's total land area, but its GDP accounted for more than one-fifth of the China's economy. The YRD has become a vital economic powerhouse of China, with Shanghai being China's financial and trade center, and Zhejiang and Jiangsu as increasingly important manufacturing bases. The YRD's total population accounts for about 6% of China's total.
2.2.1.2. Industries
The YRD's manufacturing industries are developing rapidly, partly thanks to the influx of foreign investment. Cities with largest industrial production include Shanghai, Suzhou, Wuxi, Hangzhou, Ningbo and Nanjing. The YRD's total industrial output accounted for about one-fourth of China's total. The YRD's private sector is the most developed in China, with about 1,000,000 private enterprises in Shanghai, Jiangsu and Zhejiang. Many indigenous private enterprises in the YRD have developed strong brand names in their specialized areas and become market leaders in China.
2.2.1.3. Foreign Trade
The YRD is one of the leading industrial bases as well as an important export base in China. Its exports account for approximately one-third of China's total exports. The major markets include the US, the EU, Japan, Hong Kong and Korea and exporting products include machinery, transportation equipment, electrical equipment and parts, garments, textile and raw materials |
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INDUSTRY OVERVIEW
Production
In 2005, the production of wood floors in China reached 312 million square meters, 18% increase from last year, with the market value at 4.375 billion US dollars. In the next 5 years, the production and sales of wood flooring products are expected to grow at average rate of 15-25% annually.
Export
Exports of wood floors from China are on an upswing. It is estimated that in 2010, foreign sales will cover 40% of the total production in China given a favorable international market condition. In the past few years, Chinese manufacturers of wood floorings, including hard wood floor, parquet wood floor, laminate floor and bamboo floor, have improved greatly on quality and shipments, and thus enjoyed a fast growth of foreign sales. Laminate flooring products led both in terms of value and volume, bamboo floors increase fast while the percentage of solid wood floors will decrease due to many reasons such as limited raw materials and government policies.
On the other hand, some unfavorable issues influenced greatly on international sales of Chinese wood flooring products, including anti-dumping clauses from Canada and Turkey and Investigation No.337 and 332 with USA.
Price
Chinese flooring companies are trying to improve quality while keeping prices at affordable levels. However, suppliers, especially wood floor suppliers, face price pressures from raw materials. Chinese government has imposed policies that limit logging in China. As a result, manufacturers will have to deal with shortage of domestic materials. Meanwhile, Government imposes 5% consumption tax on wood floorings effective from April 1st 2006 and the customs drawback rate decreased from 13% to 11% in 2006. International organizations have been lobbying every governmental body on reservation of forests. All of these have become obstacles that may slow down wood floor sales and productions.
Competition and Supply Concentration
It is estimated that 70% of the wood floor manufacturers will close down in the next 3 years in China and the market concentration rate will increase greatly. Rising operational and production costs require larger business scale and higher efficiency. Besides price, competition on quality guarantee and after-sales services becomes keener. Big suppliers begin to put eggs in more than one basket. Traditional players of solid wood floors set up production lines of laminate and parquet floors while new products like bamboo parquets are drawing more attentions from industry players.
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Qingdao Big Artha Wood Working Co. Ltd
Qingdao Big Artha Wood Working Co. Ltd. is one of the largest manufacturers in China for 3-Layer pre-finished hardwood parquet floorings. The company was built in 1993 and owns equipments with leading edge of technology for drying and milling hardwood. Since 1996, Big Artha Wood Working has exporting to European and other Asian markets. In 2000, it set up a joint project with US lumber companies and export its parquet flooring and lumber strips to American markets. The company is located quite near to the port of Qigndao. In local market, the company is well known for its strictly controlled temperature and humidity.
The company has 2 manufacturing lines, from drying and milling till to the U. V. finishing. The rolling lacquering machines were imported from Germany. The glue and U. V. lacquer were imported from Norway and Germany.
| Fact Sheet |
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Company Facts |
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Year established |
1993 |
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Company location |
Qingdao, China East Coast |
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No of employees |
178 |
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Performance |
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Export sales revenue 2006 |
US$1,889,200 |
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Export years |
11 |
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Local sales revenue 2006 |
RMB21, 007,350 |
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Local brands |
DAMU |
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Export brands |
N/A, OEM |
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Export market |
USA, Holland, France, Spain |
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Delivery capabilities |
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Price |
Negotiable |
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Container |
2800SQM/Container |
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Normal OTD |
2 months FOB |
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Manufacturing Index |
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Finished products/year |
200,000SQM |
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Lacquer used |
Crown, UV finishing |
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Glue used |
DYNO |
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Quality Guarantee |
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Local qualification/certificate |
ISO9001 |
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Export qualification/certificate |
N/A |
| Products and prices Qingdao Big Artha produces wood parquet floorings made of beech, birch, oak, maple and other hard wood. The normal specifications of the products are 15mmX180mmX2200mm...... |
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