China's 12,000 exporters of parkas and windbreakers shipped out US$3.8 billion worth of the products in the 10 months to October 2005. It is estimated that 85 percent of the country's exports in the line are go to OEM and ODM customers.
The US is the largest importer of China-made parkas and windbreakers, purchasing 63.8 million pieces worth US$591 million from January to October 2005. In terms of volume, Japan is afar second, importing about 40 million pieces worth US$438 million in the same 10-month period.
But the combined purchases from Italy, the UK, France and Spain make EU the top importer. Combined exports to the EU reached 183 million pieces worth US$1.6 billion in the same period.
The following are some of the key trends we see in China's parkas and windbreakers industry:
• Higher material and labor costs continue to be a challenge for most makers. Although many companies have already increased prices in 2005, more suppliers will be raising quotes by up to 15 percent in 2006.
• More suppliers will invest in automated machinery to improve efficiency and reduce production costs. These include locally made seam taping machines that speed up seam reinforcement and imported cutters that are able to cut thicker layers of fabric, saving production time.
• Buyers can expect more value added and functional releases from China in coming months. Breathability, odor-resistance, and anti-static and anti-bacterial features are among the common functions that will be available in new products.
• Even though many companies are producing higher-priced, value-added designs, low-end models will continue to be China's mainstay for the next several years.
China makers can offer most types of parkas and windbreakers. Many of these suppliers also offer specialty jackets, but mostly as a minor line. Specialty jackets are functional garments meant for a particular activity or sport, such as hunting or fishing.
Knitted jackets and models made of leather and uncoated fabric are not included in this report.
While the majority of China suppliers offer a range of jackets across all categories, there are some that specialize in just one line. More than 50 percent of the suppliers in this report make parkas, windbreakers and specialty jackets, and about one-third offer two types. These companies focus mainly on the production of windbreakers, with parkas and specialty jackets usually considered minor lines. More than 20 percent of featured suppliers, however, have parkas as their major product line and about 10 percent focus on specialty jackets.
The features and prices of each jacket type are discussed according to low end, midrange and high end in the Products & Prices section of this report. The types of materials used and where they are sourced are also presented in this section.
The R&D section discusses how makers are improving the quality of fabric and accessories as part of their efforts to release more functional and value-added designs.
The Manufacturing section details the production and QC processes in small, midsize and large companies.
The majority of parka and windbreaker suppliers in China are locally owned, but there are also a large number of foreign-owned or invested factories in the country. Reflecting this breakdown, more than half of the companies profiled in this report are locally owned and a few of them are publicly listed.
Parkas and windbreakers manufacture in China is mostly centered in Zhejiang province, where 27 percent of the interviewed suppliers are located. Fujian and Jiangsu follow, with 24 and 17 percent of the surveyed companies, respectively.
Industry Overview
China suppliers of parkas and windbreakers are raising prices by up to 15 percent and taking measures to enhance efficiency in response to the continuing increase in raw material costs and the ongoing labor shortage. A number of makers are also taking steps to improve product quality.
One of the most pressing challenges in the industry at present is the soaring cost of raw materials. The majority of fabric and accessories used to make the jackets are petroleum-based. With fluctuating crude oil prices in the world market, the cost of these materials has increased by as much as 30 percent in the past year.
The labor shortage affecting industrialized provinces in China is also a major challenge. The shortage, which was initially limited to Guangdong province, is now also widespread in the provinces of Fujian and Zhejiang, the main production hubs for jackets.
In fact, a number of factories in these areas have only half of their required permanent workforce at any given time, since most workers prefer to work on a temporary basis.
The problem is further aggravated by the large number of suppliers in this industry. Many skilled workers are enticed by companies that offer higher salaries and better benefits.
Manufacturers are thus forced to match such job offers with higher pay, better housing and training for their employees, consequently raising operating costs.
The lack of skilled workers has also forced many companies to increase subcontracting up to 30 percent to other jacket-producing makers in their area to meet delivery schedules. They often subcontract to factories producing for the domestic market, and while most companies are able to get workers when they need them, doing so has pushed up operating costs even higher.
The situation may also lead to scheduling and quality problems, since makers have less control over production.
Because of these factors, makers have no choice but to increase prices in coming months. While most suppliers will raise quotes by up to 5 percent, a handful of companies plan increases of as high as 15 percent.
To boost competitiveness, a number of companies are now shifting focus to the production of value-added models. These jackets have functional treatments and are designed for increased comfort and durability. Although these are priced 20 to 50 percent more than regular designs, there is less competition in the line.
The most significant of improvements is in water-resistance levels of fabric. The most popular types have a water-resistance rating of 2,000 to 5,000 mm. But some suppliers now offer designs with ratings ranging from 8,000 to 20,000 mm.
In addition, many companies are producing parkas and windbreakers made of high-performance materials such as Drilon, Entrant, Dermizax, Supplex and Thinsulate that are imported from the US and the EU.
Industry Composition
China produces about 30 percent of global parkas and windbreakers supply. The country exported more than 475 million parkas and windbreakers worthUS$3.8 billion in the first 10 months of 2005. Export sales were up 14 percent compared to the corresponding period in the previous year.
Supplier Profile
China National Group Co. Ltd
China National is a Japan-invested supplier of parkas and windbreakers based in Wuxi, Jiangsu province. Its 500-worker factory focuses on high volume production of midrange and high-end jackets primarily for the Japan market.
OEM orders account for 60 percent of exports and ODM, 30 percent. The company also markets its products under the in-house cnclady brand.
The company is building a new factory in Yixing, about 100 km away from the current site, with a total area of 30,000 sqm. In October 2005, the first phase covering 12,000 sqm was put into operation.
Apart from jackets, the company makes shirts and sweaters for export.
Products
Windbreakers, down jackets and parkas account for more than one-third of China National's output. Priced at around US$20 each, the jackets mainly have a micro suede or polyester taffeta shell and down padding. Zippers, snaps, buttons and toggles are used for closure. All of the jackets do not have hoods.
China National sources materials from Jiangsu or Zhejiang, but also imports from Japan, South Korea or Taiwan on buyers' requests.
The 30-member R&D team releases 20 to 30 new styles for the autumn/winter and spring/summer seasons. Counter samples can be made within three to five days provided the warehouse has enough supply of needed raw materials and accessories.
Some of the company's new jacket releases have sleeve cuffs similar to those seen in shirts. Many of these will come in shades of dark pink, shell and wine. China National will also releasing more jackets that come with a sweater in matching color, fabric and style.
Because of higher labor costs, the company will raise product prices by 10 to 15 percent in coming months. The government is requiring companies to provide better benefits and insurance to workers, effectively raising labor costs by about 10 percent.
Manufacturing
China National has two three-storey buildings, one each for sweater and jacket production.
In the jacket factory, one section of the third floor serves as the warehouse for accessories, which are sourced locally. The cutting workshop, also located on this floor, has eight or nine workers with four cutters.
Workers first plan the design's layout to maximize usage before the fabric is cut. The current utilization rate for jacket fabric is 90 percent. Each cut piece is examined for defects such as stains, oil, grease or holes before it is sent to the sewing workshop.
There are two sewing workshops on the second floor. Both workshops are equipped with local and imported mechanical and computerized sewing machines.
Plain jackets or those with silkscreened patterns are sent to the first floor for finishing and ironing. But models that need embroidery and crochet work are sent to subcontractor factories.
All outsourced fabric is inspected by machine. All finished garments are visually inspected before they are packed for shipping.
All this column of information contained in China Sourcing Reports is the result of original, independent and impartial research conducted by Global Sources analysts.
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