admin - ET2C International - Page 5 of 14

Trump Vs Biden: impact of the US election on Asia Sourcing

Industry Insights / admin / sourcing, Trump, US Election

Trump has focused on his domestic agenda to the detriment of foreign policy and global trade has suffered as a result.

Uncertainty is never a good thing for business. But it is even worse when it becomes a pervasive feature of our daily lives (like the past 18 months). The Pandemic has wreaked havoc on global business and economies as Governments have lurched from one lockdown to another. But, perhaps just as difficult for business, has been the global Politic and the rise of protectionism that has led to global trade becoming more disjointed, disparate, and more frequently caught in the cross-hairs of world leaders’ political agendas.
Now we have the US election that has gone down to the wire. At the time of writing, we are still waiting on the final votes from four states to determine the winner.

The outcome is important because it will likely have an impact on global trade. There is an expectation that, under a Biden administration, relations will likely be less fractious. Probably, there will at least be a pathway for alliances across the world stage to be restored. President Trump has focused on his domestic agenda to the detriment of the US’ foreign policy. This election should lay the foundations for greater clarity of policy and to that extent enable US business to make more informed decisions.

The Sourcing Landscape

It is a complex picture. For the past 2 years, US businesses that leverage the benefits of outsourcing manufacturing in Asia have had a sword of Damocles hanging heavy over their heads when manufacturing in Asia. Of course, the main thrust of President Trump’s focus has been the US’ relationship with China. Also, other markets have at different times been pointed to (India and Vietnam for example). Tariffs only reinforced the need for US companies to reassess their sourcing strategies to understand how to diversify their risk or move assets out of China.

What’s next?

However, a lot of US companies with a China-centric supplier base found themselves facing a range of challenges. These point to the latent complexity in a global supply chain that is often neglected as well as the current market conditions (both domestically and overseas). It is worth running through some of these to better understand the path for US Sourcing strategies moving into 2021.

Challenges of Diversification

For many sectors, President Trump forced Asian-US supply chains to look at diversification away from China (pre-Phase 1 tariffs). Some of the issues that currently need to be addressed include:

1. Entering a New Market.

Just as with moving to a new supplier, there is a cost of moving to an alternate market in terms of set-up (molds), learning curve but also potentially understanding a new way of doing business, standards, raw material supply, lead times and cost base. That is not to say that that there are not opportunities, but all these factors need to be considered and managed properly.

2. Alternate Sourcing Strategies.

President Trump has consistently talked about reinstating manufacturing across the US rust belt as part of a ‘reshoring strategy’. He may have been partly successful for large corporations, but from an outsource OEM basis, it is probably a fair assessment to say that most manufacturing sectors have not ‘reshored’ and leveraged the US manufacturing base. Similarly, although there are clear ‘Near Sourcing’ opportunities (Mexico for example), the breadth and capacity of the Asian manufacturing base exceeds any near sourcing opportunity.

3. China’s Supply Base.

Regardless of Tariffs, China is well set up for export with the investment in infrastructure, raw material availability and labour pool. It still, therefore, remains competitive (a lot of the tariff cost was passed back up the supply chain when initially introduced) and with China’s investment in ‘Made in China 2025’ may continue to be relevant for US businesses for the foreseeable future. Of note, the majority of US shoes are still manufactured in China even with the tariffs in force.

4. The Pandemic.

Company survival is the main focus at present with the US economy hindered by the impact of Covid. The appetite for moving to a new market at this time, with the potential costs of moving suppliers/markets, has diminished.

5. Locked Out.

Travel restrictions only compound the difficulty in making significant changes to one’s supply chain at this time. Without the ability to identify new suppliers through trips to Asia, there is a heightened risk of moving suppliers. Again, particularly where the appetite for change now may be diminished.

So what does this all mean?

Of course, US companies should be looking to diversify their supply chains out of any one market. It is more a question of how this is done in this current business environment. An obvious answer is to make sure that you are working with a partner who has reached across Asia and is able to do the ‘on the ground’ work required to access new markets during this period. It is another way of managing the risk and lack of visibility born out of a lack of market access whilst giving you the ability to source and manage suppliers.

That is not to say that China will not still be an important component of any supply chain, and US companies should not adopt a ‘move at all costs’ approach. Chinese manufacturing will broadly still provide opportunities for US companies as well as help embed some resilience in supply chains.

Summary

Whether a Biden administration will change the US stance against China remains to be seen. There is hope that we may at least find ourselves in a business environment that is less uncertain. And that can only be a step in the right direction.
At ET2C, as your sourcing partner, we are constantly looking to provide tangible solutions to our clients. We are already helping our US clients with their sourcing strategies during this period of disruption. Please contact us at contact@et2cint.com for more information how we can help you.

Trump Vs Biden: impact of the US election on Asia Sourcing Read More »

Food Packaging & Beyond: 4 Innovative Ideas to Replace Plastic

Industry Insights / admin / Innovation, Packaging, Sustainability

Packaging is a hot topic nowadays and food packaging is a key part of this. Considering that over the past ten years, we have produced more plastic than during the whole of the last century. There is therefore growing concern at a consumer level of its usage in food packaging and the potential impact on foods.

Is Plastic Bad for Food Packaging?

As a general point, plastic is an amazingly durable and flexible material that offers many advantages. For this reason, it is certainly difficult to replace it with alternatives. For the food industry, plastic protects food, guarding it against pressure, humidity, light, and the bacteria that accelerate rot.

Given how we live, the food we expect and the distances produce has to often travel to get to us, plastic has become an essential part of the Food industry. Often this is for single-use purposes and this is part of the issue with plastics; its end-use. Ironically, a product that is intended to be used only once (such as the majority of food packaging) is made of compounds that will last a hundred lifetimes.

Sustainable Packaging: opportunities in a new market

Green consumers are making consumption choices amongst an ever-growing selection of ‘green products’, which extends beyond the product itself. This would include food packaging. In particular, consumers, with the support of Governments in many markets, are losing their tolerance for packaging that is not easily recyclable or have other properties that lessen its impact on the environment.

What are, therefore, some sustainable alternatives to plastic packaging?

1.Bioplastics

(Excuse the technical terminology in advance !).

These plastics contain some ingredients from renewable biological sources, such as vegetable fats, plant starches and wood fibres. We can list them into two main categories:

A. PLA (polylactic acids)

Currently, the cheapest bioplastic on the market, commonly found in food packaging. It is a form of polyester made by fermenting ingredients like corn starch or sugar cane.

B. PHA (polyhydroxyalkanoates)

This is a form of polyester created and stored by bacteria when fermenting sugar or fats. Compared to PLA, it can withstand higher temperatures.

Pros and Cons of Bioplastics

Creating bioplastics requires less energy than more conventional plastics. This means that a substance like PLA, for example, produces less carbon dioxide during its production. In addition, some bioplastics use less water during production compared with conventional choices and generate fewer greenhouse gases when they biodegrade in the landfill. An important point to note is that biodegradable plastics often require certain conditions and it, therefore, requires Government-backed incentives that provide specific managed sites for the biodegrading process to be effective.

Under these right conditions, microorganisms can convert biodegradable bioplastics into water and carbon dioxide in a few weeks. But many biodegradable products may still contain conventional plastic, making them more difficult to break down.

Classification of Bioplastics.

According to their particular proprieties, bioplastics can be classified into the following categories:

• Non-biodegradable bioplastics (BIO-PET, BIO-PE, PA)
Although made from natural materials like sugar cane, they are chemically identical to some petroleum-based plastics.
• Partially biodegradable or “durable” bioplastics
Microorganisms can break these down into smaller pieces of plastic under the right conditions. However, this process generally takes longer than 3-6 months.
• Biodegradable bioplastics
They can break down into carbon and water due to the work of microorganisms. However, they are not compostable.
• Compostable plastics
Most of these plastics need industrial facilities to fully decompose.

2. Dissolving Packaging

Designers are working on new forms of food packaging to replace the unsustainable designs. Some new ephemeral alternatives to plastic, for example, can actually dissolve. This type of packaging covers a wide range: bowls made of mushrooms, cups fashioned from seaweed, and detergent-style pods for food.

Water dissolving packaging — photo credits: Notpla

Packaging that disappears is now an emerging market and definitely a trend. The water-soluble bags made from food-grade ingredients for pre-portioned oatmeal or rice are more and more frequently used. Moreover, innovative solutions that might seem bizarre but are definitely succeeding in merging functionality and sustainability. Imagine an oil bottle made from caramelized sugar, coated with wax, that cracks open like an egg. Or a smoothie container made from seaweed that will wither at the same rate as its contents, and a peelable beeswax package for rice or other dry goods.

Definitely, innovation is not the complete solution to the problem of plastic waste, but it is a critical start.

3. Edible Packaging

Let’s face it: plastic is hard to beat for packaging: it is cheap, light, and versatile and has excellent mechanical properties. However, there is broad concern about the plastic waste in food packaging and this is too often visible in the common items that end up as litter and pollution in our rivers and oceans.
Wrappers, straws, cutlery, bottles have been rethought to become a sustainable alternative to classic (polluting) options.
A new brilliant trend to replace these items with sustainable alternatives is edible food packaging.
Some companies and academic researchers are trying carbohydrates from sources other than seaweed and other groups are working with proteins (even milk protein casein to make transparent films).

Pros and Cons of Edible Food Packaging

Customers might not like the idea of eating something that usually they throw away. However, edible packaging comes from renewable sources and even if it isn’t something people actually want to eat, it would still be biodegradable, disappearing much faster than single-use plastics or even compostable bioplastics.

Another aspect worth considering is that packaging generally keeps the food from bacteria and harmful substances. Therefore, eating a food’s wrapper raises potential hygiene concerns.

4. No Packaging

Sometimes, the best solution is no packaging at all and in some cases, we can definitely avoid packaging.
Let’s think about nature, which does edible packaging pretty well! Apple and grape skins protect the fruit from microbes and the environment. Humans have also been making consumable packaging for decades: sausage casings made of collagen and cellulose, and ice cream cones for example.

Changes in the way we buy, consume, and dispose of packaging is important as well. We can therefore opt for plenty of sustainable choices in our everyday life. For example, you can bring your own refillable drink bottle instead of buying disposable, single-use plastic bottles. Likewise, you can use your own reusable bag when shopping. Another option is to buy products that have no or less packaging or that can be refilled rather than those that are single-use.

Are you looking for sustainable food packaging?

At ET2C we care deeply about the environment and are doing what we can to understand more about the broader sustainable packaging market. Whether this is for food stuffs (particularly for our staff in our own offices) and single-use plastic, or packaging for other products, we are working hard to understand what is best suited to our clients. It is a complex environment that requires specific market, product and even segment knowledge to get both the right option at a consumer level but to also be relevant to the regulatory environment of a specific market. Wasting less and being mindful of the amount of materials used in packaging is a good start.

For all your queries, please contact us at contact@et2cint.com

Download the full infographic here.

Cover – photo credits: Holly Grounds.

Food Packaging & Beyond: 4 Innovative Ideas to Replace Plastic Read More »

Industrial Manufacturing, how to build your Asian Supplier Base

Industry Insights / admin / Industrial, Industrial Manufacturing, sourcing

Industrial manufacturing can significantly benefit from creating a solid supplier base and outsourcing in Asia.

Outsource manufacturing has broadly always been reliant on raw material availability, a supply of labour and a low-cost base. It creates greater flexibility by negating the need to set up manufacturing plants that can require extensive capital expenditure and monthly overheads, not to mention the cost of maintaining safety and health standards. The same applies to industrial manufacturing, which requires significant investment in machinery and tooling and can be labour extensive.

The “New Now”

Asia already has a good supply base for industrial production across casting, forging, machining, metal fabrication, stamping and plastic injection manufacturing processes. But importantly, now at a time when companies have to cope with disruption to their client and the drop off in sales, there is a focus on stabilising their bottom line or reduce overheads where possible. This has resulted in many companies looking to activate Outsource Manufacturing programmes and move to an offshore production strategy. That said, with markets currently closed, looking to manufacture high-quality complex engineered components requires attention to detail and local resource in order to achieve the best outcome. Finding the right partner is absolutely critical to the success of such a move to maintain on-time shipments and more importantly consistent quality but by getting this right there will be significant cost benefits.

The benefits of outsourcing industrial components

In addition, most businesses only look at component level for industrial manufacturing when looking at offshore destinations. With lower labour costs it is important to focus on sub-assemblies or fully-finished assemblies to reduce the touchpoints at destination. This leverages the low-cost advantages by removing local labour directly impacting total cost ownership, which creates a significant competitive edge.

Industrial Manufacturing in Asia

Although there are significant benefits of offshoring your industrial production, there are still challenges that lie ahead given the different markets, culture and business environments. Understanding how these are overcome will be important to the success of implementing this particular strategy. From our perspective, looking to develop relationships over the medium term (and beyond) is a central factor to delivering the product you need.
Here are some key points to consider in working with Asian industrial manufacturers:

1. Define your requirements clearly

The variation of language always poses a challenge when it comes to understanding the project and its parameters, particularly when interpreting technical drawings. However, with clear and defined technical specifications and the right partner it should be possible to get accurate costings at the outset.

2. Quality Assurance

Given the variation in industrial manufacturing processes, it is important to conduct the necessary quality assurance which should cover a technical assessment of machining capability, safety procedures in place and ethical standards. There are a range certifications that should be available for different manufacturing processes such as ISO 9001, ISO 45001 and SA 8000. Make sure that these are also independently verified.

Industrial quality control ET2C sourcing — Photo provided by Tool Inc.

3. Build commitment

You need to commit to forming and cultivating a healthy long-term working relationship. It is important to treat the manufacturer as a partner and to give your full attention to the partnership. Particularly, where there are moulds and upfront charges required.

4. Close contact and communications

Asian factories prefer those who spend more time working closely with them. They expect their partner to get involved in sample making, order placement, quality control, production planning, and shipping. Therefore, it is best to have a team (on the ground) to work with the factory on a daily basis.

5. Business culture

It is still important for foreigners to understand and appreciate Asian business culture. Accommodating these cultural differences is a key component in developing long term relationships. More than ever, have a reliable ‘partner’ within your supply chain will add value and drive benefits.

Overview

There are significant benefits of moving industrial manufacturing overseas but you need to make sure you have the resource and capability to execute this offshore strategy. At ET2C, we have 20 years’ experience in industrial manufacturing out of Asia. We are therefore well placed to help you migrate some of your production into the Asian manufacturing sector. Our team on the ground will walk you through the process and help manage the suppliers and quality upstream. For more information contact us at contact@et2cint.com

Industrial Manufacturing, how to build your Asian Supplier Base Read More »

Sourcing Furniture and Outdoor Trends 2021

Industry Insights / admin / Furniture, Outdoor, sourcing, Trends

Sourcing Furniture and Outdoor Trends in the ‘New Normal’
A year ago, our lives were about to change abruptly. The spread of the Covid-19 virus, which has culminated in a global pandemic, has turned everything as we knew it upside-down. The subsequent constraints due to social distancing have impacted our perception of space (both indoor and outdoor).
People have generally been kept in their homes for months and we sought outdoor spaces to feel somehow relieved.

The lucky ones who had access to balconies, patios or gardens found the outdoors as their personal saviour. Certainly, with the adoption of new habits, our use of spaces in the home has changed with them. Private outdoor spaces are a precious commodity more now than ever before. They represent new kinds of freedom, allowing us to accept social isolation without feeling trapped, and also to enjoy fresh air without worrying about breathing in the virus.

New needs in this New Reality

People are now designing their living space in line with the adoption of these new habits and ultimately a greater reliance on time spent in their homes. Without a doubt, ‘Staying in’ is the new ‘going out’. The 2021 trends will push the outdoor spaces to create the experiences that we crave in a stylish, thoughtfully designed atmosphere.

So what are the new trends expected for Spring/Summer 21?

1. Indoor ↔ Outdoor

New trends will reflect the reimagined importance of the outdoors as a place where one’s private life can open up to our well-being such as fresh air, natural light and social interaction. The garden, always considered an “outside space”, is now a part of the home, dedicated to specific activities, such as working, exercising, meditating and yoga.

The feeling of intimacy outside is a big part of this outdoor trend. To create a flow from your inside space to the outside area your backyard, porch or patio should support everyday life not just supplement it. As an extension of your internal living space, furniture and accessories such as rugs, lights, mirrors, plaids and will become more commonplace outdoors reflecting this shift in how we interact with this type of space.

Obviously, where design can imitate the living room furniture, the function needs to also factor in external influences such as the weather. Now that you have bridged the divide between them, both your interior and exterior design will work in harmony.

2. Tiny Balconies: Urban Gardens and Permaculture

For sure, the combination of comfort and functionality gives new value to the outside space.
Even those that do not have access to a garden, but just to a tiny balcony, want to get the most out of what they have. For this reason, for Spring-Summer 21, also small spaces outside will be designed like gardens. The style and design will be all about making space look bigger. Such solutions will include using vertical space, laying borders, having clear pathways, and creating specific zones or outdoor ‘rooms’.

What furniture should you choose? Think round to save space. Curves soften and open up space rather than harsh lines and enclosing angles. Choose round tables and stools, for example.

More than a Balcony: An Urban Garden

Not only will the balcony be designed like an additional room of an apartment, but it will be designed like a smart urban garden. In 2021, planting small raised beds and smart vertical gardens on the balcony will be a clear trend. The holistic principles of permaculture will influence these tiny gardens to show they can be both productive as well as ornamental.

3. Eye-catching Outdoor Lighting

A good lighting system is paramount to the enjoyment of outdoor spaces in the evenings. It is important to add the right kind of light to make the outside space visible and safe. While before the white lights were the most common choice, colored filters are now an option to add extra warmth or create cool tones.

Lanterns are a classic that will stay but will be also revisited with new designs and materials.
Spring/Summer 21 will see also small lights, hidden in plantings and walkways, become more popular. Their strategic use will complement plants, accentuate lawn décor and stylize particular areas.

Environmentally Friendly Lighting

Even when it comes to outdoor lights, sustainability matters. Bright LED lights will continue to give a sustainable twist to the outside space. Supporting eco-friendly living styles, these lights are energy-efficient and have incredibly long lives (up to 100,000 hours!). In addition, solar-powered lights are becoming increasingly popular with homeowners who wish to take advantage of natural resources as well as saving on electricity bills.

4. Bright Colours

In terms of colour options, the next season will see the juxtaposition of warm comforting hues and bright color pops. Soft neutral shades of white and grey will be the natural base for the outside décor while bright colored details will complete the space balance with striking accents.

So besides the classic white, grey and the new entry “Shabby Chic”, keep an eye on the recent Pantone Fashion Color Trend Report for Spring/Summer 2021. Marigold, Rust, Illuminating, and French blue will definitely stand out in your gardens, patios, and balconies.

5. Natural materials

For the next Spring-Summer season, expect to see a boost of natural materials. Eco-friendly garden furniture is always in fashion thanks to the aesthetic appearance and the ambience of comfort.
Wicker furniture made of twigs makes it possible to achieve convenient streamlined shapes that add an element of style. Also, rattan Items are robust and generally resist rain or sunlight and are great for outdoor use.

Wooden furniture can also be safely operated in outdoor conditions if its surfaces are treated with a water-repellent coating and varnished. Certainly, woven materials add texture, and you can easily dress them up with bright decorative pillows to create a contrast. Natural options will distinguish not only furniture but also décor elements. You will see more sustainable solutions in gardens. The plastic pots will be increasingly replaced with natural alternatives such as coco-liners.

Sourcing Furniture and Outdoor, we can help!

We have developed our own range of Garden products out of China, Vietnam and India. Taking the best of each market, we have pulled together some great products that are perfect for outdoors, whether it is furniture, coco-liners, hanging baskets or lighting. Moreover, we have attained FSC certification to ensure that our suppliers ethically source their wood raw material. For all your needs, please contact us at contact@et2cint.com

Sourcing Furniture and Outdoor Trends 2021 Read More »

5 Famous Shoes Made in Vietnam

Industry Insights / admin / Footwear, sourcing, Vietnam

Shoes made in Vietnam are a trend, making the country the third-largest producer of footwear in the world. …

5 Famous Shoes Made in VietnamRead More »

5 Famous Shoes Made in Vietnam Read More »

Strategic Sourcing for the New Now

Industry Insights / admin / Covid19, sourcing, strategic sourcing

Strategic Sourcing has always played an understated role when it comes to business success. The fact is that companies that get this right should deliver lower product costs or higher margin propositions that directly impact EBITDA. Similarly, just as sourcing has led the way out of a crisis before, this function is well placed to do so again in the wake of the latest Pandemic. However, success will require a wholly different approach going forward.

The ‘New Now’ is a heady concoction of working from home, virtual meetings, a lack of travel and a prominent relationship with your computer screen (and those behind it!). This should ease over time (one hopes). However, the evolution of retail has been ushered forward at a quicker pace than anticipated. Consequentially, Retailers and Brands are having to think through how they adapt to meet the expectations of their customers.

However, while past economic downturns mainly focused on the financial implications (survival, cash preservation etc), the “New Now” has the added complexity of an already shifting sourcing landscape, volatile demand and the need to build robustness into the supply chain to address at the same time. How should companies therefore move forward? What are the changes they should look to make to their China Sourcing or Vietnam Sourcing strategy? We will highlight some key areas below, but one point that is pertinent is the need to act now, which could be a challenge for some companies; one obvious example being (understandable) budget constraints.

Building Supply Chain Resilience

McKinsey, the strategy consulting firm, has released a recent report on “Risk, Resilience & Rebalancing in Global Value Chains” that points to the need to build robustness within complex global value chains. It notes the increased frequency of supply chain shocks but also the increasing severity of these events, which can be a result of climate change, financial crises, trade disputes, pandemics, cyber-attacks, terrorism and supplier bankruptcy. Interestingly, the report quantifies the intervals that can be expected for different lengths of disruption:

1-2 week disruption: 2.0 years
2-4 weeks: 2.8 years
1-2 months: 3.7 years
2+ months: 4.0 years.

This certainly underlines the necessity to build in a layer of resilience to any company’s supply-chain given the potential for disruption. This “New Now” is built around this need to be more resilient but also more agile and efficient in how the Sourcing function acts.

Strategic Sourcing 3.0

The Pandemic is clearly one of these shocks and one that has lasted longer than 2 months in some cases but uniquely has had a global impact which has covered both supply and demand. There are clear lessons to learn where significant disruption has been felt. We have set out some of our thoughts on what is required for companies and their supply chains going forward.

1. Supply Chain Resilience

An obvious starting point. Companies who have found themselves in only one market and with limited suppliers would have had issues difficult to solve. Continuity builds resilience and having contingency plans is always beneficial. To do this develop a deep understanding of your suppliers beyond Tier 1 manufacturers (ultimate transparency). Look to also multi-source across jurisdictions to eliminate any country-specific risk.

2. Partnerships

This has been a recurring theme across some of our past newsletters. True value creation will be reliant upon the relationships you have across your supplier base. This can mean co-investing in ranges, committing to a period beyond transactional cost led order cycles or paying that little bit more to enable investment at the factory level that will in turn drive future efficiencies and cost reductions. Ultimately, innovation needs to be a collaboration over a medium-term horizon. Certainly, you should also consider partnerships across the supply chain (such as digital platforms and service providers).

3. Agility

Agility within the sourcing function will be critical. This may be a challenge where more traditional roles and management structures have been historically used across most sourcing functions, and particularly more so in Asia. The ability to respond quickly to changing circumstances will be important going forward as demand remains elusive and supply challenging. For example, setting up strategic cross-functional teams for targeted opportunities.

4. Digital & Analytics

The retail sector has been talking about this for years. However, the budget has often not been made available to truly invest in digital and analytics to bring greater efficiencies and meaningful data collection. This has now changed given most companies both working remotely and at a distance from their suppliers (being ‘locked out’). Such capability covers aspects of supplier mapping, automation, risk analytics, quality control technologies right through to vendor performance management.

5. Sustainability

Consumers have had a chance to re-evaluate their behaviour and how they used to consume products. The likely trend will be a re-emergence of sustainability across factories, products and logistics to align to this demand. This will result in additional drivers ranging from quality to reliability on top of pure cost opportunities in lower-wage countries. Look for suppliers that can support your needs as well as developing regulatory frameworks as well.

The importance of Strategic Sourcing

Strategic sourcing is an important component of any business. It is more critical than ever to invest in your supply chain and make sure you are working with the right partners to drive value to your business. Those companies that adapt and push through change across their sourcing function will return to pre-pandemic levels quicker than their competitors (albeit no guarantees that your colleagues will move from the virtual to the real world in the near term!).

At ET2C, we can help manage your Asia Sourcing across multiple markets with teams on the ground as well as work with our clients on elements of the ‘New Now’. Do you want to know more about the future of sourcing? Join our Free Webinar on September 17th! Our team will share some ideas and thoughts on the road ahead.

Register Here to Join our Free Webinar

Strategic Sourcing for the New Now Read More »

Face Mask: Fabric is a Safe and Sustainable Choice

Industry Insights / admin / business, finance, Industry

Wearing a face mask is still one of the safest ways of preventing further spread of the coronavirus.

While many countries are experiencing uncertainty due to unclear Government guidelines and fear of a second/third wave of infections, the case numbers remain persistently high across many places across the world. In the United States, for example, there has been an average of 50,000 cases per day in the past week. At the time of writing, in New York and California, more than 1 million people have been infected.

The ‘R’ number (reproductive rate) still sits above 1 in 20 US States. Some states have had to re-impose limits on the number of people in confined spaces (such as offices) and gatherings as well as inter-state travel restrictions.

Meanwhile, the virus is evolving, impacting not only high-risk patients but also young people, previously more resistant to the contagion. Aside from social distancing measures and washing hands regularly, wearing a face mask is still one of the most effective ways to protect people from further contagion (primarily to stop those with the virus being able to spread it).

DIY face mask: is it safe enough?

It is important to remember that the protective masks are not all the same. Different types of masks offer different levels of protection. In particular, homemade masks that do not include any particular filter are not so effective. Already in 2013, research by Public Health England demonstrated that a surgical mask stops transmission 3 times more effectively than a homemade mask. In the last couple of months, we have been working with our partners across Asia to provide a range of Cloth Masks that could represent a more sustainable alternative when compared to disposable products, while assuring some additional protection from further contagion.

Cloth Masks from Vietnam: The Sustainable Alternative

Although at the beginning of the Pandemic protecting peoples’ health was a clear priority, this has now changed and there is a now growing focus on the impact of disposable PPE products on the environment. The Mediterranean already has ‘Covid Waste’ of disposable masks and gloves overlaying the usual cans, bags and disposable cups.

A cloth face mask is certainly a more sustainable option because it is washable, reusable and recyclable. A perfect choice for many consumers that care about the impact they have on the nature around them.
In Vietnam, several textile businesses have been dedicating their production lines to antibacterial masks and Nano Silver Masks to help combat the virus. If you want to choose a sustainable alternative to surgical masks, without sacrificing a level of protection, these cloth masks are a great option for you.

3-PLY Droplet Resistant Antibacterial Face Mask

Material: 100% cotton. You can wash it (up to 30 times) and dry for reuse.
The 3 integrated layers offer great protection against airborne particles and droplets containing viruses and bacteria. The nose adjustable clip helps keep the mask fit to the face. Anti – UV and water-resistant, the internal layers are dust-proof and antibacterial, blocking 99,98% of bacteria. There are two sizes available: S for kids and M for adults.

Nano Silver Mask

100% Cotton, this mask has 3 integrated layers.
The middle layer is treated with Silver Nanotechnology that works as a safety filter. In fact, it eliminates small particles of bacteria that pass through the outer layer of the mask.

Nano Silver technology is an antimicrobial colloid composed of silver nanoparticles stabilized by a polymer that exhibits excellent antimicrobial efficacy across a wide spectrum of microorganisms.
While Silver inhibits the oxygen exchange in bacteria and kills it, this technology has been can enhance that effect.

Looking for Fabric Face Masks? We can help!

We are working with our partners in Vietnam to provide a range of Cloth Masks to combat this deadly virus. In addition, we do have other medical products for the healthcare sector should they be needed to protect peoples’ health. For all enquiries, please contact us for more information at coronasupplies@et2cint.com .

ET2C Vietnam - Cloth Face Mask - Product Offering - — Click here to download our Cloth Masks Offering

Face Mask: Fabric is a Safe and Sustainable Choice Read More »

India Sourcing Insights – We Are Garden

Industry Insights / admin / Garden, India, sourcing, WAG

India Sourcing – Strengths of the Garden Products sector

As part of our We Are Garden series, we have been looking at alternate markets outside of Vietnam where we had already identified product opportunities within the Garden & Outdoor sector. Our India Sourcing team have therefore been looking for opportunities within this sector to further complement our offer from Vietnam. Raw material, labour cost as well as investment in the manufacturing sector are all advantageous characteristics which India has in abundance.
More than ever, sourcing strategies are looking to remove dependency on any one market and spread risk around different countries. India has a growing workforce and has product expertise in certain categories that plays into the We Are Garden initiative. This is beneficial at both a product and sourcing strategy level. Certainly, companies in this sector would be well placed to look at India sourcing as part of their overall strategy.

Garden Products – Key Industries

As your Asian sourcing expert, we have identified key categories within this sector which include some of the following products:

Garden Tools (spades, forks, trowels, rakes and hoes)
Coir Products (liners, hanging baskets, fibre, ropes, chip blocks)
Jute/Cotton Products (Pot holders, seed bags)
Garden Furniture (Stool, benches, wooden couches)
Garden Accessories (bird baths, lamps, feeder, watering cans).

Notably, some of these products have beneficial import duties into certain markets, particularly when compared with China.
To build on some of the insights we have provided at a factory level, we recently spent some time with a Coir supplier in the industrial area of Tuticorin.

The Coir Industry

Coir is largely produced in the coastal regions. The continuous awareness about environmental protection contributed to the increase in its demand. Sustainability and use of a natural fibres has become increasingly important to the Consumer. Being bio-degradable in nature, this has buoyed the category considerably over the past 5 years.
Currently, the Indian coir industry exports to around 70 countries worldwide and the Indian Coir Board is looking at doubling the export revenue in the upcoming years. The Government has also played a vital role in reviving this traditional industry and has set up many initiatives to support it.

Coir Supplier

We arrive at the factory after a long drive, off the main road, we come to the factory site and meet the CEO of the business. Notably, with the current Covid-19 crisis in India, the team let us wear protective clothing for the tour of the facilities.

This vendor, one of the first in this region, opened the doors for business in 1998 and now exports a wide range of coir products to USA, Middle East, Australasia, South America and EU countries.

Production is at full capacity and full use is being taken of their large warehousing unit that is currently holding approximately 30 container loads of products. At capacity, the facility can hold up to 50 container loads. Notably, the factory produces up to 1,000 tonnes of product each month.

India Sourcing – Interview

1. Which countries within the Asian Region do you see as your main competitors?

We see Sri Lanka and Vietnam as our main competitors. Even though these countries are the biggest producers of Coir, the Indian Coir industry is much larger and competitive pricing coupled with quality and Innovation makes India a better proposition.

2. What does ‘Sustainability’ mean to your business?

Coir is a natural product and our production process follows International standards with Zero harm to the natural Environment. Certainly, we believe in creating new organic products based on client requirements. Moreover, we educate our Employees to work ethically towards Zero wastage.

3. How do you continue to develop your export market and client base?

We have both knowledgeable and experienced business development team focusing on increasing our client base. Also, we aim to feature in many Global Trade Shows and are also looking to use Social media to increase our client base. Certainly, we are looking to have long term business relationships with clients by supplying best quality products at right pricings on-time.

4. What are your biggest challenges as a business?

It is difficult to keep everyone happy but we strive to work towards zero customer complaints. Due to Covid-19, we have had some manpower issues, but we these have been addressed now.

5. What is the future for the Indian manufacturing base in your product category?

The annual growth of the coir Industry in India is estimated at 5% in terms of Annual Export Volume and Indian factories are working on manufacturing new products as well. In addition, the Indian Government has formed the Coconut Development Board to boost coir production as well. Also, most factories in India are phasing out the traditional production process in the coir industry by replacing manual labour with modern equipment so as to eliminate inefficiencies in the production process and to enhance productivity and quality.

Summary

As an India Sourcing company and having been on the ground for over 9 years, we have identified the Garden Product and Outdoor sector as a growth manufacturing sector in India. Where necessary, we are already working with Indian manufacturers to produce high quality products.

For more information, please contact us at india@et2cint.com. We will help your business positively bloom!

India Sourcing Insights – We Are Garden Read More »

EVFTA ready to start!

Industry Insights / admin / EVFTA, sourcing, Vietnam

EVFTA will boost Vietnam Sourcing for the EU Market.

After a decade of talks and negotiations, the European Vietnam Free Trade Agreement (EVFTA) has been ratified by the Vietnamese assembly. The trade deal will likely take effect on the 1st August 2020. Vietnam has long been seen as the ‘Workshop of the World’ with its ever-growing manufacturing sector and this trade deal should only support this expansion. It will reduce tariffs on products imported into the EU market over the course of 7 years, with some commentators pointing to 44% increase in imports.

The Current State of Vietnam Manufacturing

Even before this Pandemic, a lot of companies (particularly US-based) were looking to spread their Asian sourcing across the region. This has ensured that they were not too dependent on one market. Certainly, Vietnam sourcing was a key component of this strategy. However, the country’s manufacturing sector was at full capacity.
To a point, there have always been limitations in terms of scale and supplier networks. For the first, you just have to look at the population when compared to China; circa 90 million as a total population against 1.6 billion people. In fact, the migrant worker population within the Chinese manufacturing sector is still estimated as 300 million strong.
Secondly, Vietnam has often relied upon other markets for raw material supplies and accessories. This added to both lead time and also price.

EVFTA & The Future

This trade deal will reduce the tariffs on imports into the EU, almost all tariffs over a 7 year period. The good news is that after the deal takes effect, under the GSP regime, the EU will eliminate approximately 85% of import tariffs on Vietnamese goods. Conversely, it reduces barriers for EU businesses to invest and operate within Vietnam. This is all at a time when trade wars, protectionism are on the rise and the Pandemic has disrupted sales markets globally. Undoubtedly, this will open up the manufacturing sector to additional investment, both domestic and international, as companies look to take advantage of the available labour, rates and manufacturing opportunities.

Product categories that will benefit include:

– Footwear
– Furniture
– Garments & Apparel
– Furniture
– Garden Products

The key role of raw materials

One point that is pertinent to the benefits of this Free Trade Agreement is centred on the rules of origin that will qualify for the Certificate of Origin being issued and the reduction in the duty on import. In the past, Vietnam has been reliant on the import of raw material coming in from overseas. Consequently, some industries are going to enhance their local supply chains to take advantage of this deal.

Requirements for the tariff reduction

‘’Originating” will be key to the tariff reduction. Products will be considered ‘’originating” under the Treaty if they meet one of the following requirements:
• Wholly obtained in Vietnam; and
• Products produced in Vietnam incorporating materials which have not been wholly obtained there, provided that such materials have undergone sufficient working or processing within Vietnam.
Many goods still do contain materials and components imported from countries not party to a trade agreement. In fact, sectors like automotive and electronic are good examples where greater domestic production is needed before any advantages of the FTA will be attainable. Currently, 62% of materials for the electronics industry and 53% from the automotive sector are sourced from abroad. Therefore, greater efforts are required to improve linkages between domestic suppliers and foreign enterprises.

Vietnam Sourcing & ET2C

ET2C has been on the ground in Vietnam for the past 13 years. We have strong connections across the manufacturing sector for all our clients Vietnam sourcing requirements. In particular, we have been manufacturing and exporting a range of products across Garden Products, furniture, ceramics, soft goods, shoes and even cloth masks during this pandemic.
We have also attained FSC certification back in August 2019 so that we were able to export wooden products from Vietnam and ensure that the raw material is being sustainably managed. We have strong connections with furniture manufacturers throughout Vietnam, which now one of the world’s largest exporting countries for wood and wood exports with around 4,500 timber processing enterprises across the country.

New opportunities for European Retailers.

Vietnam will undoubtedly benefit from the EVFTA. European retailers will see more opportunities to leverage their connections with South East Asia. This coupled with the fall out from coronavirus and the rise in protectionism, will lead to an increased interest in the Vietnamese manufacturing sector. For all your Vietnam sourcing needs, please contact us at Vietnam@et2cint.com.

EVFTA ready to start! Read More »

Sourcing chronicles: ET2C – 19 years and counting!

Industry Insights / admin / Buying Office, et2c, sourcing

Sourcing has evolved significantly over the past 20 years. As more members acceded to the WTO around the turn of the Millenium, borders were liberalised and outsource manufacturing on a mass scale followed. Lately, there has been increased protectionism and international trade has been impacted over these last 3 years.

As a celebration of 19 years of business, we thought to explore these years through the eyes of our CEO, Richard Archer-Perkins. He told us how the business was started and how he has managed to continue operating in Asia for such a long period. No easy feat!

The Beginning

Back in 2000, I was asked to come to China to help a friend establish his own oxygen mask manufacturer. He had already been making these products at a facility in Taipei and wanted to leverage the Chinese manufacturing market and labour pool. Initially, with family in the UK, this was to be a nine-month stint. Who could have imagined that twenty years later I would still be here!

ET2C’s History

It all started at the Javits Center in January 2001, when I visited New York at the Pure Exhibition. Having seen the emergence of a mass manufacturing base in China, I walked the show going to every booth asking whether there was anyone interested in working with China. There was a lot of interest, but there was only one company that came to the table; a body jewellery company called Silver Moon Concepts who operated in Florida, USA – not that I knew anything about Body Jewellery! I managed to find a supplier (who traditionally worked with watches), who had the machinery and material to make surgical grade stainless steel (316L) and importantly create the necessary shapes. Then I went about finding staff to create a mini-production line to put the product together and pack them. I opened the office on the 8 May 2001.

The evolution of the business

From then, I managed to onboard additional clients in 2002 and 2003. We were saving our clients considerable cost on goods at a time when China had just begun to open up. On the back of this, I managed to get some large retailers as well as other wholesalers and Brands. Today, we’re proud of having in excess of 100 regular clients. Moreover, we are constantly looking to give them sourcing solutions that drive their bottom-line growth. We now have operations in multiple sourcing markets and are looking at further expansion this year. In addition, we have a food distribution business and are also planning to add more product lines to sell into China in 2020.

ET2C video — Watch our Company Video to know more!

Sourcing in Uncertain Times

There is no doubt that the World is in turmoil. COVID-19, trade wars, international sanctions and so on. International trade will continue being an important driver for the global economy as it has over the course of history. There are questions over whether China will continue to be the factory to the world – or rather retain its dominance – and perhaps some countries will look to be more self-reliant. Regardless, ET2C will continue to strive to identify more opportunities for our clients from better suppliers, new markets and in a more sustainable way. Inevitably, technology will also play an increasingly important role in this journey across all facets of our business but also in terms of how we all engage together.

Medical Supplies

We are nimble, which enables us to pivot when required. Consequentially, in what was an incredibly complex regulatory and environment, we managed to help our clients get some PPE products. Importantly, we did not lose one dollar of our clients’ money in an environment that was very high risk. It was important to follow our usual processes to ensure we were dealing with the right suppliers. The South China Morning Post referred to it as the “Wild West”. I am also proud to have supplied to the NHS as they ramped up their PPE stocks.

Top Industries

We work across multiple categories, but primarily these can be defined into two divisions, Consumer goods (Garden, Fashion, Pet, Toys, Furniture, Homewares and Health & Beauty) and Industrial goods. We currently source from India, China and Vietnam. Also, we are looking to add additional jurisdictions as part of our 2020 strategy. Countries being assessed at present include Mexico, Thailand, Malaysia and Taiwan.

Buying Office

Our Buying Office solution has always been the backbone of the company and helped the business to grow. I still believe that this is conceptually correct as there is no doubt that (particularly in these Asian markets) in order to control your supply chain it is important to have people on the ground at the source. Controlling suppliers, quality, on time delivery and compliance from a distance is very difficult. Our model is the most cost effective, transparent and simplest available and second to none.

Challenges and Opportunities

Always be prepared to take risks! One never knows which one will yield opportunities and ultimate success! Who would have thought that dealing in body Jewellery would create the business we have today. It has been an amazing journey full of good and challenging experiences – albeit not always pleasant – but that is life and looking back I really look forward to the next exciting episodes! I look forward to celebrating with everyone at next year’s 20 year celebrations!

With almost 20 years of experience, ET2C is well positioned to help you with all your sourcing needs, whatever they may be. We look forward to designing new solutions to make your business more successful. Please contact us at contact@et2cint.com.

Sourcing chronicles: ET2C – 19 years and counting! Read More »