Appendices
1. Equity Joint venture
This form of joint venture between the Harvest and their Chinese partner is an equity joint venture, based on China’s law to joint ventures promulgated in 1979. The partners manage the company jointly and profits are shared in proportion to capital participation. The duration of this type of joint venture last between 15 – 20 years and there is a possibility to extent the contract. The big advantage for the Chinese partner is that there is only a 15 % profit tax when the joint venture involves a partner in a special economic zone, or special administrative region such as Hong Kong
1.
Harvest International has a head office in Hong Kong. This is where administrative activities are carried out. The management of this head office travel frequently between the office and the production plant. The Chinese partner is part of the nuclear department of the Chinese government.
2. ISO
Harvest has acquired the ISO 9001 certificate. The biggest portion of this license is that current processes are redesigned to address all of the requirements in the ISO standard. After these processes are modified or developed to meet this standard, those processes are then controlled. Documenting the processes as Quality System procedures is part of this control.
Many organizations decide to implement ISO 9001 and obtain registration because it assures customers that the company has a good Quality Management System (QMS) in place. An organization with an effective QMS will typically meet customer expectations better than an organization that does not have an effective QMS. Information on this can be found at www.the9000store.com.
3. China houseware export market
Over the years, Harvest has been capitalizing on the ever growing possibilities being a Chinese manufacturer of items which are sold in the Western market. In figure 1 China’s houseware export market has been growing considerably nearly every year
2.
1
Sung, 1991: 56
2
Zhang & Zhang, 2005
4. Major Chinese suppliers for Houseware
The South of China has developed immensely during the past years. Mainly, the Pearl River Delta is known to have many suppliers for the Western market. With China opening up its borders more every year, this region is quickly becoming very attractive to source products from directly. The factories of Harvest are in this region as well, making it geographically an eligible sourcing partner for Western companies.
Figure 2: sourcing pattern for Western companies 1992 1993199
4 199 5
1996 199 7
199 8
1999 200 0
200 1
200 2
2003 Textile Industry 9.31 23.4
9 - 3.36
- 1.06
13.6 6
4.8 4.63 7.89 4.45 4.37 3.244.24
Garments 8.4 21.3
8 - 3.11
- 0.98
12.6 1
4.47 4.33 7.39 4.19 4.13 3.078.90.
Leather, Furs, Down 9.1 23 -3.3 - 1.04
13.4 2
4.72 4.56 7.78 4.39 4.32 3.2 9.69 Furniture
Manufacturing
12.3830.3 9
- 4.11
- 1.31
16.9 2
5.78 5.52 9.33 5.19 5.07 3.733.99 Papermaking Products 12.1729.9
2 - 4.06
- 1.29
16.7 5.71 5.46 9.24 5.15 5.02 3.7 7.66 Plastic Products 9.23 23.3
2 - 3.34
- 1.05
13.5 8
4.77 4.61 7.85 4.43 4.35 3.239.00 Houseware Products 8.74 22.1
7
-3.2 - 1.01
13.0 1
4.6 4.44 7.59 4.29 6.22 7.1410.00 Ordinary Machinery 10.1225.3
5 - 3.57
- 1.13
14.5 7
5.08 4.88 8.31 4.67 4.58 3.395.76 Special Purpose
Equipment
10.9427.2 - 3.77
-1.2 15.4 5
5.34 5.13 8.7 4.87 4.77 3.52793.
Hong Kong/ Southern China Yangzi River Region Northern China Taiwan
Western Europe
USA & Canada
77
13
13
12
11
10
OUTLOOK 2006: GEOGRAPHIC LOCATION OF MAJOR SUPPLIERS IN %
Figure 1: Growth rate of China’s export in the houseware sector
5. Houseware
Traditionally, houseware items involve mostly cooking utensils, dishes, and other small articles used in a household, especially in the kitchen
3. However, defining houseware as items used mainly in the kitchen would be too narrow of a description, as many more categories can be included in the definition of houseware. The Hong Kong Trade Council (TDC) defines houseware very broadly. The TDC show cases many different types of houseware items during trade shows. Table 1 presents the list of items included in the categories:
· Artificial Flowers
· Bathroom Accessories
· Cleaning & Supplies
· Furniture
· Gardening & Outdoor Accessories
· Green Products
· Handicrafts
· Hardware & DIY Products
· Health & Personal Care Items
· Home Decorations
· Household Textile
· Kitchenware and Gadgets
· Lighting
· Pet Supplies
· Small Electrical Appliances
· Tableware & Bar Accessories
· General Houseware Items
· Trade Services & Publications Table 1: categories of houseware
6. Registered Global Sources and HK TDC buyers
3
http://dictionary.reference.com/search?r=2&q=housewares
HK TDC registered buyers by region
North America
35%
Asia 18%
Australia 15%
Europe 26%
South America
2%
Other
1% Middle East
3%
South America Middle East Europe North America Asia
Australia Other
Global Sources registered buyers by region
North America
22%
Asia 22%
Australia 4%
Other
6% South America
6%
Middle East 9%
Europe 31%
South America Middle East Europe North America Asia
Australia
Other
HK TDC registered buyers per industry
Gifts and Premiums
16%
Garment &
Fashion 16%
Electronics Jew ellery 19%
& Watches 7%
Toys 8%
Bags &
Footw ear 4%
DIY &
Hardw are 11%
Other 6%
Househol d products
13%
Gifts and Premiums Garment &
Fashion Electronics
Household products Jew ellery &
Watches Toys
Bags &
Footw ear DIY & Hardw are
Global Sources registered buyers per industry
Computer 15%
Telecom 12%
Electronics 11%
DIY &
Hardw are 9%
Auto Parts 8%
Garments
& Textiles 14%
Fashion Accessori
es 14%
Other 6%
Home products
11%
Computer Telecom Electronics DIY & Hardw are Auto Parts Garments &
Textiles Fashion Accessories Home products Other
HK TDC registered buyers by nature of business
Other 16%
Wholesale r/Retailer
18%
Exporter 15%
Buyer 8%
Manufact urer
17%
Importer 26%
Other
Wholesaler/Retai ler
Importer
Exporter
Manufacturer
Buyer
Global Sources registered buyers by nature of business
Other 6%
Wholesaler /Retailer Exporter 38%
11%
Buyer 11%
Manufact urer
15%
Importer 19%
Other
Wholesaler/Retail er
Importer
Exporter
Manufacturer
Buyer
7. List of respondents
Name Country Business type Product groups
4Total buying in China
5(€)
Everplast Austria Importer Bathroom Accessories
Kitchen Countertop 9.000.000
H.K. Lassen Denmark Importer Kitchen Countertop
Closet items 7.000.000
F&H of Scandinavia
Denmark Importer Bathroom Accessories
Kitchen Countertop 5.000.000 MSV France France Manufacturer Bathroom accessories
Closet items 14.000.000
Wenko Germany Manufacturer Bathroom Accessories
20.000.000
Coronet Germany Manufacturer Bathroom Accessories
13.000.000 J.G. Schütte Germany Importer Bathroom Accessories
10.000.000
Lefheit Germany Manufacturer Ironing Boards
Closet items 20.000.000
Glass Cleaning Greece Manufacturer Kitchen countertop Stepladders
Gardening 5.000.000
Artex Italy Manufacturer Bathroom accessories
Kitchen Countertop 12.000.000 Brabantia The Netherlands Manufacturer Waste baskets
Closet items 30.000.000
Haceka The Netherlands Importer Bathroom Accessories
2.000.000 Tiger The Netherlands Importer Kitchen Countertop
Storage items 1.000.000
Rayen Spain Manufacturer Ironing boards
Shelving system 10.000.000
Mypa Spain Importer Ironing boards
Shelving system 3.000.000 Division
Internacional
Spain Importer Ironing Boards
Closet items 5.000.000
Metaltex Switzerland Manufacturer Bathroom Accessories
Closet items 15.000.000
4
Based on Harvest’s categories as found on http://www.harvesthousewares.com/products/index.html
5
