Europe and North America are unmatched pedigree in relation to the manufacture pen goes, but in recent years, their high production costs meant that most of the unbranded pens are now gone to India, Korea or China. This is particularly true of promotional pens and printed pens because they tend to be price sensitive products. This article examines how this change has taken place.
We all know the best brands of pens such as Parker, Waterman, Cross, Sheaffer and Mont Blanc. These are the pens that are traditionally in Western countries and is still largely true, because today the prices of premiums resulting in higher margins and has less reliance on low production costs. However, in recent years are beginning to see Asian plants that appear in the manufacture of components for some of these brands and in some cases throughout the pen itself. In the latter case it is primarily to serve the emerging markets in Asia itself. Many believe that this is the thin end of the wedge and is a precursor to the wholesale abandonment of production in the west pen completely. This would follow in the footsteps of what has happened in the promotional pens and promotional products market in general, where the vast majority of production is now done in India or China.
So what was so attractive to Western importers has allowed Chinese producers of promotional pens to flourish? Here we consider the main reasons:
1. The cost of the work: There was a time when the cost of Chinese labor were as low as 5% of the west coast and this has made the unit cost of promotional pens very low, as most of the assembly has been hand and labor intensive. Any meeting in the West hand was prohibitive and consequently much of the assembly was done using expensive leased lines automatically. The cost of design, construction and maintenance of these lines is extremely high and must be reflected in the unit selling price. This is not a consideration in which the Chinese are concerned that all pens promotional pens are hand assembled and therefore the prices are much lower.
2. Tooling cost: It 's generally cost between 50,000 to 120,000 for a set of quality tools for the manufacture of printed promotional pens when in Europe or America. This cost is high due to the length of time it takes to make an instrument capable of producing up to 36 barrels a pen in a single mold. This requires high levels of precision so that the instrument is operating efficiently, with little downtime and minimal maintenance so that unit costs can be controlled. Labor costs are not a major consideration for Chinese producers so that they can afford to make some small tools to mold, say, 4 pens at a time. These tools will wear out relatively quickly, but their replacement costs are insignificant, and consequently there is no need for them to recoup this cost in the unit cost of the promotional pen. The cost of tools to a Chinese pen can be as low as 2000 so the initial costs of launching a new pen is no longer prohibitive, and consequently Western pen manufacturers, importers and designers are increasingly looking to China as their source.
3. Grants: Although the production costs in China are a fraction of Western costs, the Chinese government has adopted a policy in the early days of subsidizing their heavy industry. This had the effect of driving their prices up to nearly the cost of materials for most of the decade. While these subsidies have disappeared from promotional pens because of international anti-competitive policy served its purpose, making it very attractive to Chinese manufacturers western buyers.
4. Historical, because Hong Kong was a prolific British rule and a trader of goods not produced with Great Britain for many decades before the expansion of the promotional pen in China the Chinese to exploit this report when articles began to appear. There have been numerous importers and shippers who have great familiarity with the existing sales channels and this has made the import of promotional pens easy to Britain and then elsewhere in Europe. America followed some time later.
Today, it is estimated that if plastic promotional pens are interested in more than 90% have their origins in the Far East and there is no sign of significant change again to the western producers. Prices are rising in China but are still considerably cheaper western pens produced. The effect on producers of western pen has been devastating, and many famous names have disappeared in Europe and America in recent years, never to return as the skills base for the molding of promotional pens is too late .
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