sourcing Archives - Page 2 of 8 - ET2C International

COVID Update – China Market

Industry Insights / / , ,

Coronavirus China news ET2C Int. Sourcing Procurement

 

15th March 2022

With Covid cases now on the rise in China (3,500 plus cases reported yesterday), the Chinese authorities have taken measures to contain the outbreaks in line with their Covid Zero strategy.

Over the past two years, this has been targeted to outbreaks and largely localised as a result.
Outbreaks have now been reported within large cities, including Shanghai, Shenzhen, Changchun and other key manufacturing centres.

As at last Sunday, the city of Shenzhen (17.5 million people) went into lockdown for one week so that all residents would undergo three rounds of testing. Shanghai has also locked down certain business districts as well as residential blocks to undergo targeted testing.

At this stage, there are no Port shutdowns, but inevitably there will be staff shortages or other related disruption that feeds into supply chains and the movement of goods to port both in the Southern Ports near Shenzhen and also Shanghai. Similarly, we would anticipate disruption to Manufacturers to the extent that they are within the targeted areas. It does remain the case that COVID protocols are in place in most factories, which will serve to slow the spread.

Due to these measures, ET2C’s offices both in Shanghai and Shenzhen have been temporarily closed for this week (14th to 20th March), but teams are working from home and we do not expect any impact to our service levels.
Should you have your own enquiries, please contact your relevant account manager or at our email, contact@et2cint.com

FOR IMMEDIATE RELEASE

COVID Update – China Market Read More »

Containers: the outlook for 2022

Industry Insights / / , ,

Containers the outlook for 2022

Containers are the lifeblood of Global Trade and the Pandemic has perfectly illustrated how important they really are. Now with Omicron still raging across multiple markets, what is the latest on global trade flows?

Overview

Containers are commonplace wherever you travel. Whether loaded up at a Port, on the back of a lorry on the motorway or sitting on a train carriage, they are an ever-present symbol of trade and the movement of goods. Introduced back in 1956, containers were a transformative catalyst for trade to become truly global by enabling cheap and easy ways to ship goods around the world.

The Pandemic disrupted the movement of containers around the world, which is much more a delicate dance that ebbs and flows with the seasons. Suddenly in April 2020, containers were not readily available where they usually are and there was a complete mismatch between supply and demand. For example, thousands of containers were being stored in warehouses by the UK Government filled with PPE, when usually they would be on their way back to the Far East in all likelihood.

containers maanagement logistic sourcing ET2C

The result has been an incredibly challenging year in 2021. Container prices on certain high demand routes went up by 6 times as demand for space far outstripped capacity. This was compounded with bottlenecks at Ports, labour issues, equipment shortages and carriers introducing blank sailings to re-jig container availability (or profiteer in some instances).

Containers – A Traumatized Sector

According to a recent survey conducted by Container xChange, the container industry is rethinking its strategy. In particular, 70% of respondents said that they have plans to diversify sourcing options and resort to holding more inventory. This is certainly the case, although there is still a broad resilience within Chinese supply chains that appears to have negated some of this migration out of China.

There is a further expectation that the industry is still downbeat about supply chain performance in 2022; 65% of respondents said that performance will either deteriorate further (11%) or remain the same (54%) in the year ahead. But this is also justifiable, the scars of 2021 are still very raw.

Logistic management port sourcing procurement

The container gridlock has definitely traumatized this industry and continues to do so. This has not been helped by shippers using boxes as storage, container line failures, inefficiencies in matching box owners to potential users, and longer transit times and port congestion that has made container rotation slower.
Ports in LA are still struggling to clear the backlog of container ships waiting off the Coast, although there are positive noises being made about this ameliorating into Q2 of this year.

Outlook for 2022

It is clear that the shipping bottlenecks have exposed one of the most serious threats to the global economy as it emerges from the pandemic: whether the worldwide traffic jam remains gridlocked or begins to flow again in 2022. If the bottlenecks persist, freight costs will remain high, space for cargo on ships will be limited and retailers and manufacturers will have to endure chronic delays. That could in turn fuel sustained inflation, prompt supply chain upheavals and accelerate the consolidation of shipping networks, fundamentally changing world trade.

Bloomberg_Freight

The cost of shipping freight, as an example, into the US shows little sign of abating. It is true that there has been some softening of freight rates, but these may not be so much to do with supply constraints easing, but demand dropping around Chinese New Year (and higher stock inventories prior to the end of 2021). Across all modes of transport, record highs have been recorded based on year-on-year comparisons.

Looking across these different modes of transport, Bloomberg reports that there has been an 18.3% jump in shipping by truck and a 29% rise in Ocean Freight rates.

Delivering Inflation

More and more Central Banks are having to review comments made in 2021 that inflation was only going to be temporary. The reality is that inflation is now being imported in containers (freight rates and higher commodity prices would be built into the product landed cost) and if this has not yet hit the retail shelves, it is shortly about to only compound monetary policy decisions.

Blackrock,

the investment house, has recently pointed to a ‘new and unusual market regime, underpinned by a new macro landscape where inflation is shaped by supply constraints.’ They suggest that this was perhaps overlooked by the Mandarins setting looking at the cause of inflationary drivers. These have been predominately a result of supply constraints all along global supply chains. Whilst demand was high in certain sectors, production is always constrained by the weakest link in the supply chain.

To take the example of the Fashion industry, supply chains will continue to face disruption as a result of logistical bottlenecks, material shortages and rising costs, according to The State of Fashion 2022 report by The Business of Fashion and McKinsey & Co. There remain significant challenges around product and resource shortages as chocked supply chains and rising shipping costs undermine operations. Over recent months, numerous companies reported difficulties in managing inventory flows or have tied lower sales forecasts to supply-chain blockages. Inevitably, in response, many have turned to remedies that include more nearshoring, in-store supply stocking, and agile operating models designed to respond flexibly to change.

Summary

It is by no means a simple picture. The challenges of 2021 will persist, and supply led inflationary pressures will push up prices along the supply chain. The tentacles of sourcing operations around the world will adjust their reach to counter some of these difficulties but such decisions will need to be married with other important business decisions around sustainability, which will likewise drive strategy in 2022.

Trade will continue to flow. Containers will continue crossing oceans and landscapes. The question is whether the blockages of 2021 can be addressed (or more supply of containers delivered) to get Global Trade back on its feet.

At ET2C, we are already working with our clients across multiple markets as their partner of choice and are well placed to help manage more complex supply chains. With a team on the ground, we make sure we provide the visibility required to our clients. For more information, please contact us at contact@et2cint.com.

Containers: the outlook for 2022 Read More »

Sourcing Furniture from Turkey

Industry Insights / / , ,

Sourcing Furniture from Turkey ET2C Int.

Sourcing Furniture from Turkey is an alternate option for those companies currently purchasing from the more common Asian supply base.

Overview

Sourcing furniture from Turkey is an untapped opportunity for many businesses. Furniture plays a vital role in our lives as it essentially turns a house into a home giving us a space for comfort and relaxation. Varying in shapes and sizes, furniture takes up most spaces in our homes, helping us have a healthier and more organized lifestyle. These days, people tend to spend a lot of time and money to find furniture that adds charm, class, style, and function to their homes or offices, which leads to furniture becoming a huge sector; globally in dollar terms it was $547 Billion in 2020 and is and is expected to grow a further 44% by 2027 to $789 Billion.
When looking for overseas manufacturers of furniture, the two most common countries would be China and Vietnam. Both have the raw material and the labour pool to produce furniture across a wide range of styles and with different materials. It is no surprise, therefore, that they take the number one and two spots on the list of the largest furniture manufacturers/exporters globally (China and Vietnam respectively).

furniture factory manufacture Turkey Sourcing Procurement ET2C Int.

Covid has significantly disrupted both these Asian markets due to the related shortages of containers and the subsequent upward pressures on freight rates. This has been no more profoundly felt than in the furniture sector when buyers are often trying to cram as many bulky items as possible into containers. When you are only able to get 40 items in a container (compared with 10,000 pieces), the cost implications of the high freight costs will have a tangible impact on your landed price. The result is that buyers are scouring other markets for furniture opportunities particularly where there are freight savings from ‘near-sourcing’ countries.

Lucky Number 13

Casting one’s eye down the list of furniture manufacturers/exporters, Turkey makes the cut at 13th. Is sourcing furniture from Turkey a viable option for you? There are many reasons and we have set some of these out below:

1. Heritage

The Turks have been producing furniture for centuries. There are examples of furniture that date back to the Hittites in the Anatolian region. As with many ancient civilisations, the skills and workmanship were passed from generation to generation via family-owned workshops. These workshops, which are still active today, have been producing hand-carved furniture the same way for generations. This expertise was built upon in the dawn of industrialization as mid to large scale production capabilities were developed. These large-scale factories enabled automated mass production of standardized products with the majority of output destined for export.

Handcrafting wood turkey sourcing supplier manufacture factory ET2C int.

2. Raw Material

Turkey has access to a range of raw materials that either grow domestically or are produced locally (such as steel etc). Particularly with regards to wood, there is a broad abundance of local wood that can be used in furniture production providing a range of different physical characteristics. The total land area of Turkey is more than 80 million hectares, with forests making up 27.2 percent (21,2 million hectares) of that. With 9,000 herbaceous and woody plant species, Turkey possesses one of the world’s most diverse floras. This gives the country easy access to many trees for roundwood production such as Calabrian pine, Crimean pine, Scots pine, beech, fir, spruce, cedar, and oak.

Forests Turkey Raw Material wood sourcing ET2C Int.

3. Established Industry

Turkey’s milling and wood manufacturing industry is qualified to supply wood products to overseas markets, especially those countries that do not have an advanced wood fabricating segment. Besides, Turkey is in a favourable position to provide semi-processed wooden items and furniture to the EU owing to its flexibility, comparatively lower labour costs and design capability.

Furniture Factory Turkey Sourcing Procurement ET2C Int.

4. Export Track Record

Turkey exports to over 170 countries and the biggest importers of Turkish furniture are Germany, Saudi Arabia, USA, France, UK, Israel, the Netherlands, Qatar, Romania, United Arab Emirates, the Czech Republic, Italy, and Azerbaijan. Moreover, many of the manufacturers have reinvested in their capabilities during the pandemic.

5. Not Asia

In order to build ‘flex’ into any supply chain it is important to identify suppliers in different markets. With Turkey sitting on the edge of Europe, it is perfectly positioned as a near sourcing option when it comes to furniture.

Summary

Supply chains and sourcing strategies have been largely turned on their head over the course of this Pandemic. Buyers are looking for other opportunities outside of the more traditional sourcing jurisdictions, like China. Sourcing furniture from Turkey will only enhance your sourcing strategy and breadth of the sourcing market. This is especially important if you are a European business.
As ET2C, we are well placed to provide you with the best furniture products Turkey has to offer. For all enquiries, please contact us at contact@et2cint.com.

Sourcing Furniture from Turkey Read More »

Ethical Sourcing: A Conscious and Responsible Buying Approach

Industry Insights / / , ,

Ethical Sourcing ET2C Int. sourcing procurement

Ethical sourcing is increasingly important to a range of stakeholders. Whether the consumer, the retailer, the importer, the manufacturer or even the investors, ethical sourcing aligns with ESG principles and is part of a product’s ‘story’.

Ethical sourcing is a sustainable and responsible approach to supply chain management and sourcing. It is defined by the Chartered Institute of Purchasing & Supply (CIPS),  as “the process of ensuring the products being sourced are obtained in a responsible and sustainable way, that the workers involved in making them are safe and treated fairly and that environmental and social impacts are taken into consideration during the sourcing process.”.

Factory workers China sourcing

 

Why is Ethics Important in Sourcing and Procurement?

Over the past two decades, the consumer has become more aware of the impact a particular product has on the environment or the factory workers being used to produce it. This has driven additional visibility up supply chains to the point where some retailers even provide complete transparency of all their suppliers for their customers to check as they see fit. This is all part of ethical sourcing, and the ability to provide this level of information is just one example of the sourcing process respecting all ethical and environmental standards expected of retailers and brands.

At the same time, companies have taken on greater responsibility when it comes to ethics and how they source products. This requires a much greater understanding of which manufacturer a company decides to partner with, what their beliefs are and what their environmental footprint is like. Some companies are even certifying as a B-Corp – their purpose is to build a more inclusive and sustainable economy – which includes elements of ethical sourcing.

Ultimately, ethical sourcing will help remove abusive practices. There is no reason why slavery or child labour should be tolerated in this modern world. The more this can be enforced by the companies doing the sourcing, the less the commercial benefit for those profiteering from these abhorrent practices.

Therefore, it is paramount that buyers selecting and managing suppliers look out for signs of such activities in their supply chains.

policy contract sourcing procurement

The Ethical Trading Initiative (“ETI”) is internationally recognized as a ‘Base Code when it comes to labour practices. The ETI Base Code is structured on existing conventions of the International Labour Organisation, and has nine clauses that define ethical practices:

  1. Employment is freely chosen
  2. Freedom of association and the right of collective bargaining are respected
  3. Working conditions are safe and hygienic
  4. Child labour shall not be used
  5. Local living wages are paid at national legal standards
  6. Working hours are not excessive, complying with national law
  7. No discrimination is practiced
  8. Work performed must be based on a recognised employment relationship established through national law and practice
  9. No harsh or inhumane treatment is allowed

The Benefits of Ethical Sourcing

Commonly, companies often commit to ethical and sustainable practices for obvious reasons such as risk mitigation or improving brand image to grow sales. However, there are even more benefits for companies that opt for ethical sourcing and do it properly.

1. Employee Engagement

Many studies have shown that companies with solid Corporate Social Responsibility programs not only boost a strong public image but also engage more people from inside the organisation by enhancing higher employee morale and creating a culture of loyalty.

As a consequence, a reputation for sustainability and ethics often makes an organisation a more attractive proposition as a prospective employer than those who have less of a purpose.

2. Customer Satisfaction and Market Shares Increase

Now more than ever, customers expect companies to be more ethical and sustainable in their business practices and actively value brands that are doing so. A few companies have in fact increased their market share by committing to ethical sourcing practices (please note that it is important to genuinely commit to such practices rather than simply go through it as an exercise in ‘green-washing’).

Several ethically sourced products made from organic, renewable, or recycled materials have an extremely loyal customer base (AllBirds for example). Aligning your products and services with customers who value sustainable business practices can increase your company’s market share.

apparel fashion factory ethical sourcing

In fact, according to the data from the OpenText survey (September 2021), nine in ten global consumers want to buy products sourced in a responsible and sustainable way and 83% would pay more for goods that are ethically produced. Interestingly, consumer demand for ethically sourced products has increased during the global pandemic. The survey shows that nearly 20 per cent of the respondents said that this has only mattered to them within the last year, which indicates that the Covid pandemic, and some of the product shortages we have faced, has made consumers re-evaluate their stance on ethical sourcing.

3. Margin Growth

Although products that are sustainable and ethically sourced generally have a higher cost, there is evidence that ethical sourcing processes both can reduce costs over the long term and also support higher sales prices in store. In 2015, The World Economic Forum estimated that sustainable and ethical sourcing processes reduce supply chain costs from 9%-16%. In addition, they can increase revenue by up to 20% for responsible products, and increase brand value by 15%-30%.

Some examples are the use of energy-saving light sources, the improvement of insulation, the elimination of wasteful steps and processes within production, to name a few. Or, in addition, the use of environmentally friendly materials.

4. Brand Boost and Accountability Enhancement

One of the benefits of ethical sourcing is improving the reputation of the brands your business produces.
The reason behind the brand boost is that by adopting ethical processes, transparency and accountability become major components of your supply chain. As stated above, this can be compelling from a consumer perspective, but it is important that it is a genuine position to drive real benefits. A measure of this is how well employees engage in the companies’ beliefs.

5. Make a Difference

It sometimes just feels good to do good! At whatever level, positively impacting a manufacturer, a worker or an employee feels like the right thing to do. Make that difference!

Summary

At ET2C, we are already working with our clients on ethical sourcing and best practices when it comes to managing their supplier base. With a team on the ground, we make sure we provide the visibility required to our clients. For more information, please contact us at contact@et2cint.com.

Ethical Sourcing: A Conscious and Responsible Buying Approach Read More »

Multifunctional Furniture: The New Trend to Optimize your Space

Industry Insights / / , , ,

Multifunctional Furniture ET2C Int. Furniture Sourcing Procurement

Multifunctional Furniture has become an increasingly important trend as people look to maximize the use of space within their homes.

Overview

Multifunctional furniture has the ability to enhance our homes. The ‘winds are changing’ and more and more people are mindful of their living space and choosing functionality over size. With increased property prices and cities being overpopulated, optimizing your space seems to be the best solution for those who are conscious of their budget and space, and want the furniture to last longer. It is also part of the current surge in downsizing that is the driving force behind a range of creative and elegant furniture solutions.

multifunctional furniture space room sourcing ET2C Int. Procurement

Multifunctional Furniture is particularly useful when you need to decorate smaller apartments and living spaces or simply adapt a trendy and interesting solution to your space. It is also a good way to make a bold statement about your personality and enable your lifestyle with furniture that adapts to your way of life.

Multifunctional Furniture

What is Multifunctional Furniture and what are its advantages? The right piece of Furniture can:

  • Help keep your belongings tidy;
  • Optimize living space;
  • Make the best use of small apartment; and
  • Feature interesting and trendy design.

Multifunctional Furniture can be a part of any room’s interior, including the kitchen, bedroom, study, kids bedroom, Living room and even terrace or balcony.

Below are a couple of ideas for different living zones and spaces.

1. Furniture for Kids’ Room

Having their ‘own corner’ is extremely important for children of all ages. And regardless of how big or small the room is, everyone realizes that a child should have as much space as possible to play in, learn and discover. Below are some great solutions for Children of all ages.

  • Childbed with storage unit;
    Drawers under the bed and wall shelves can help to organize clothes, toys and books. This design will grow together with a child and will be a great fit in the room of a toddler right through to a teenager.

Child bed with storage unit furniture sourcing procurement

  • Childbed with slide and playground;
    Nothing presents a better example of combining functionality and fun when it comes to young children. The bed can be combined with a slide, ladder, exercise wall or even treehouse.

Childbed with slide and playground furniture sourcing procurement

  • Craft paper folding bench
    This unique and sustainable collapsible design allows up to 10 people to be seated. When folded together, it can be stored under the table or used as a side table. A perfect piece of furniture for an unexpected children party. And it is also available as a stool option.

Craft paper folding bench furniture sourcing procurement

  • Nesting Children’s Furniture
    The nesting children’s furniture looks like a gradient side table when stacked together neatly. When pulled apart, they form two sets of desks for different age groups. Each desk component is equipped with storage compartments as well.

Craft paper folding bench furniture sourcing procurement

2. Space-saving Pet Furniture

Over the past year, lots of office workers spent significantly more time at home due to the Pandemic with extended lockdowns and working hours’ adjustments. For many of them, this meant spending more time with their pets. Below are some of the solutions that allow furniture to be shared with your pets:

  • Rocking-2-gether chair
    This chair is a combination of a rocking chair and a pet house. A great spot for relaxing on the chair along with a furry friend absorbing some afternoon sun.

Rocking-2-gether chair design furniture trends

  • Cat litter box/planter
    Some litter boxes are designed to look like a house plant to cleverly become part of the home décor. With a two-piece bottom and a cut-out, a cat can easily take care of its business. The Litter box can also be hidden inside the side table or storage unit.

Cat litter boxplanter furniture sourcing procurement cat design

  • Cat hammock
    It is easy to share a table for a morning coffee or late evening snack together with your cat by fixing a cozy hammock right under the coffee table. It can also be placed on any chair or even inside the ottoman to get an extra secure spot for your pet.

Cat hammock furniture design pet sourcing procurement

  • Bookshelf Window Perch
    For those small pets, a Bookshelf with step pads and perch will easily blend into the study or living room’s décor. Storage units can be used to declutter your home, and give a pet some exercise as well as help with fighting anxiety and boredom by giving free access to the window when an owner is not around.

multifunctional design

3. Table solutions

  • Table-mirror transformer
    A table is an essential part of any space, that allows you to dine, do some office work, practice a hobby or to just read the paper. A table that serves as a mirror when on the wall, and as a dining table or work surface when down is a great example of Multifunctional Furniture.

Table-mirror transformer furniture trends sourcing

  • Foldable dining table
    From a slim side table to a full dining table in a couple of minutes – these multi-use furniture pieces can seat up the whole family when fully unfolded.

Foldable dining table sourcing procurement furniture

  • Extendable kitchen trolley
    Handy for storing extra dishes, using as a breakfast bar or adding a bit more workspace when preparing meals. This trolley can be easily moved away when not required allowing more mobility in the kitchen.

Extendable kitchen trolley

  • Stacking table
    Stacking units come apart easily to be used as separate coffee tables. When put back together it can be used as a book/storage shelf.

Stacking table

Multifunctional Furniture – Develop Your Concept

We at ET2C work with a range of factories from China, Vietnam, India and Turkey in order to support and develop new Multifunctional Furniture concepts. Aluminium, steel, wood and even cardboard can be a material for inspiration. Reach out if you are looking for some unique pieces of furniture that can help to optimize home space and organically fit into all kinds of homes. For more information, please contact us at contact@et2cint.com.

 

Multifunctional Furniture: The New Trend to Optimize your Space Read More »

China Sourcing: When the Lights Go Out

Industry Insights / / , , ,

China Sourcing Electricity Shortage Procurement ET2C Int.

China sourcing has been the mainstay of offshore manufacturing for the past three decades but what happens when the lights go out?

Overview

China sourcing remains an integral part of most sourcing strategies. Of course, there will be companies that buy from specific offshore markets and in certain product categories that do not need to lean on China’s vast manufacturing base at all. However, China’s factories still cast a long shadow across Asia and beyond. Its scale alone allows it a seat at the ‘top table’. Even in a tumultuous year for supply chains already grappling with freight rate hikes, container shortages, raw material rises and long delays inbound into Ports, heightened demand has helped retain its global competitiveness (albeit China’s PMI has marginally decreased to sub 50 indicating a small contraction in manufacturing output). But then the lights went out…

China Sourcing – In the Dark

In a bold and largely unexpected statement via video link at the UN on the 22nd of September, President Xi Jinping announced that China would double down on its environmental targets.

“China will scale up its Intended Nationally Determined Contributions by adopting more vigorous policies and measures. We aim to have [carbon dioxide] emissions peak before 2030 and achieve carbon neutrality before 2060”. President Xi Jingping to the UN Nations, 22nd September 2021.

This was certainly commendable from an environmental perspective. China is the world’s largest sourcing of carbon dioxide, responsible for approximately 28% of global emissions. The issue was the potential impact on energy in China. There were already structural issues with mining coal within China (lack of investment, alternative power etc) and this new target would only limit electricity supply to China’s industrial lands. After the Golden Week Holiday, local governments began limiting the supply of electricity (and at short notice in some cases) to avoid missing environmental targets for reducing energy and emissions.

China Electricity Shortage power use ET2C Int. sourcing services

There is no doubt there has been disruption across many provinces and manufacturers, which has hindered their production capacity and extended lead times. It is largely dependent on the manufacturing type and the province as to how much electricity is rationed. For example, we have seen factories currently being limited to 3 days a week, which will serve to extend lead times; the less time for machines to operate, the less the factory output.

A Glimmer of Light

As Buyers were wiping beads of sweat from their brows, trying to understand what the implications would be for orders currently being produced – particularly those due to complete and ship in the melee pre–Chinese New Year – the Chinese authorities acted. They ordered coal miners to boost production to allow acute power shortages to be addressed. Of course, the bigger issue was the power supply to peoples’ homes, which was also in jeopardy going into the harsh Northern Chinese winter.

Another piece of good news came just after the recent COP26 climate talks, co-hosted by Italy and the UK, where China reaffirmed its goal of achieving a carbon peak before 2030 and carbon neutrality by 2060. Even if coal output rises in the short term to address a nationwide power shortage, the Chinese authorities have pointed out that this does not signal a return to reliance on coal-fired power.

coal extraction workers energy power china

In summary, we should see the power shortages ameliorate end of November into December from a manufacturing perspective.

China Sourcing in the Spotlight

So, what does this mean from a China Sourcing perspective? Has this forced companies to look outside of China, even in the short term? This latest round of disruption certainly serves as a reminder of the need for companies to build in ‘flex’ to their supply chains. Some key take-outs include:

1. China’s Manufacturing Base

Unlike many other manufacturing markets, there is an innate resilience within China’s manufacturing sector. The past thirty years have allowed factories to hone their skills and expertise, to the extent it is always a challenging market to compete against.

2. Plan B & Plan C

Building resilience means having a range of suppliers that can be ‘tapped into’, particularly factories that are in different countries. This helps to eliminate country risk – just as when China shut down in response to Corona back in March 2020. Look at near sourcing options and alternate markets in Asia that complement each other.

3. Plan & Build in Stock

The past 6 months have seen companies replenishing stock levels – part of the reason for the demand through 2021 as economies started opening post-Covid lockdowns. It is important that Buyers are looking to plan by potentially bringing orders forward and adding order replenishment stock. This will help mitigate the extended lead times for goods to get from Source to Shelf. A lack of stock is the worst possible outcome – do what you can to have stock to sell.

ET2C Int. coal carbon extrusion sourcing procurement raw materials energy power china

In short, having options will put you in good stead. The latest disruption for China sourcing is just one example in a long list over the past 18 months. Some US Companies that shifted production into Vietnam on the back of US tariffs on Chinese products found themselves recently unable to produce any products due to the lockdown. As Socrates pointed out, ‘You don’t know what you don’t know’ so plan accordingly.

Summary

2021 continues to provide challenges for sourcing markets. China sourcing, even with power shortages over the short term, will remain important. However, make sure you are doing what you can to build flexibility (and resilience) into your supply chain.

At ET2C, we are well-positioned to provide our clients with support across a range of different sourcing markets. We are well placed, as your Sourcing Partner, to help you during these difficult times. For more information, please contact us at contact@et2cint.com.

China Sourcing: When the Lights Go Out Read More »

Commodities Boom Fuels Prices at the Factory Gates

Industry Insights / / , , ,

Commodities Boom Fuels Prices at the Factory Gates ET2C Int.

Commodities have recently surged on the back of the devastation the Pandemic has left in its wake. Supply and demand distortions, combined with replenishment of inventories as economies emerge from their Covid ‘hibernations’, have led to an increase in commodity prices.

Overview

Commodities have pushed the Chinese Producer Price Index (PPI) to a 13 year high in August (the PPI is a measure of the average change in the price of goods sold by manufacturers) rising 9.5% from a year earlier, the National Bureau of Statistics (NBS) recently reported. This is the fastest rate of increase since August 2008. It reflects the impact that raw material prices have at the factory gates, and in a sourcing context, the cost implications for overseas buyers. Even with the current freight rates and their impact on ‘landed cost’, this is a further hammer blow to retailers or wholesalers, who are already struggling to get stock for the Christmas season both physically in-store and at the price points needed.

Commodities & China Sourcing

From Metals, coal to plastics and rubbers, there have been price rises across a broad range of commodities over the past 6 months. In some instances, this has forced factories to restrict price validity when providing quotations. Although, not to the same extent as with PPE back in March/April 2020 when there was hyper-inflation due to the extreme demand.

As we all know, factories generally tend to be very quick to point to the ‘ticker’ or graph showing a commodity price trending upwards when negotiating price points. We probably know even more so that the same is not true when commodities start to drop in value, when the factory will point to stock in the warehouse they need to use first.

ET2C Int. Graph 1 commodities
Aluminium Bar (China) Price Trend

 

The fact is that China still counts for over half of the international demand for commodities. It is a behemoth when it comes to consumption and its role in the global commodity market is simply too large and significant to be overlooked. Although the export sector is only one relatively small part of this demand (for example other parts include domestic manufacturing, the construction sector etc.) it gives manufacturers an availability of raw material across a broad spectrum of different products. It is one aspect of the country’s manufacturing DNA that is often overlooked but it is significant relative to other sourcing markets (even with China’s recent Environmental targets impacting certain material production).

One just has to look at South East Asian manufacturing markets, like Vietnam, and certain raw materials will need to be imported from Chinese suppliers. Simply put, it adds cost, lead time and layers of complexity, which plays to the Chinese manufacturing base.

What goes up, must (eventually) come down

It does appear though that there is some softening in the price of metals with the prospect of China’s construction boom slowing and more broadly economic growth decelerating, which will in turn limit demand for these materials. The price of copper and iron order has already started to fall. This may be goods news for some product categories that have already had to absorb some price rises.

Pricing Strategies

When commodities are on the rise, making purchasing decisions is not easy. The basis upon which you make a purchasing decision (the price) can change as quickly as you cut the PO. This is particularly true of the more commoditized products for which the relative percentage cost of the raw material is above 30%. In any business, certainty is beneficial. In such markets, the following ideas should be considered:

1. Raw Material

Make sure you are aware of the raw material fluctuations, not only a global spot price, but also the price in the market you are buying products from. It is important to validate what the factory is saying, and what is driving their prices.

industrial metal sheets ET2C Int. sourcing

2. Origin

Where is your factory buying its raw materials from? For some smaller markets, it is important to know this so that you can see where potential issues may arrive in the future particularly if they are shipping it in from other countries.

3. Partnerships

We have always pointed to developing true partnerships with suppliers/factories. This will engender much greater visibility of costs and raw material pricing. Also, looking over a medium-term to long term horizon will mean that fluctuations in commodities generally even themselves out. Short-termism and transactional purchases will unlikely provide any benefits.

4. Index the Commodities

When you have longer-term relationships, and you have set out your annual spend, the best way to manage commodity fluctuations is to agree on a base price of the most significant raw material, and then index movements. So, for example, agree on a price of Aluminium and then based on movements both up and down, agree on total FOB pricing that reflects these movements. That way, you have greater certainty, and can make sure that you have sustainable supply going forward. It is the most equitable way of dealing with such price variables.

technology

Summary

We continue to operate in an uncertain market and at the busiest time of the year. Inflation across the supply chain is already driving price increases (see our petition for the UK Government to counter these inflationary pressures). Commodities have been on the increase, but with some challenging headwinds, there may be some let-up and softening of price points into Q4 of 2021.
At ET2C, our solutions are centred around visibility. If you need to know more about raw material price points, and other market data, we are well-positioned to provide our clients with all the relevant information. We are well placed, as your Sourcing Partner, to help you during these difficult times. For more information, please contact us at contact@et2cint.com.

Commodities Boom Fuels Prices at the Factory Gates Read More »

Global Supply Chains & Covid-19

Industry Insights / / , , ,

Global Supply Chains & Covid-19 sourcing procurement ET2C Int.

Global supply chains are being tested like never before with constant disruptions that have now spanned 17 months since the beginning of the Covid-19 Pandemic.

Global supply chains are complex. This is often taken for granted when goods arrive at your warehouse.  In fact, these global supply chains often involve large distances, multiple countries, many companies and lots of people that all need to be appropriately in sync to deliver the products you order on time. With all the recent Covid-19 disruptions, there are now concerns about the fragility of these global supply chains and the implications for the remainder of 2021.

The Covid ‘Monkey’

It seems that no Country can really shake the ‘monkey from their back’ when it comes to Covid-19. Even countries that have a ‘zero covid policy’ are struggling in the face of the Delta variant. Where the East has largely enjoyed 15 months of normality (if that even exists anymore) whilst the West has lurched through multiple lockdowns in 2020 and 2021, the converse is now true. The West has been quicker to vaccinate their populations and is now ‘opening up’ on the basis that there will be a ‘vaccination wall’ to minimize hospitalizations. Meanwhile, the East – with many countries pointed to as examples of how to deal with Covid-19 – is now broadly in a state of panic given vaccinations were not seen as a priority. No country, regardless of their Covid strategy has truly loosened the Monkey’s grip.

Global supply chains ET2C Int. covid 19 pandemic sourcing procurement

From a sourcing perspective, this is currently having a significant impact on the ability to both manufacture and ship goods, which deserves a quick market-by-market recap.

China

China is still open for business but the spectre of Covid looms large. Yantian Port was temporarily shut down due to a Covid outbreak. Seen as one of the busiest ports in the World, it was a good example of the impact Covid can have on the movement of goods. Although there was some significant disruption at the time, with goods being moved to alternate exit routes, the Port was re-opened in a matter of days notwithstanding the backlog of shipments that still needed to be processed.

Just recently, Mid-August, Ningbo was likewise shutdown on the back of one case of Covid. This is a Port that moved 5.44 million 20ft equivalent units in 2020. This only further exacerbated the current fractious shipping landscape by limited the outflow options for shipments.

There have been other disruptions that have hit the region, such as the typhoon that hit the East Coast of China in Late July and the dramatic flooding that has only exacerbated the current issues. And this is all in the build-up to Black Friday and the busiest quarter of the container shipping year – Christmas and Chinese New Year.

This has all had an impact on prices at the factory gate; a combination of Covid induced fragmentation of logistics capability and excessive demand from the West super-charged by the need to replenish inventory stocks. In July, the factory PPI was up 8.8%.

Vietnam

Southern Vietnam is currently in a state of paralysis. The Delta variant has led to HCMC (the epicentre) being in some kind of lockdown for the past 8 weeks, with some of the largest case numbers (plus 6,000) being reported today midway through a two-week complete lockdown in which people are forbidden to leave their apartments.  Although there have been continued Directives issued, there appears to be little let-up in the case numbers.

logistics warehouse sourcing procurement ET2C Int.

Surrounding provinces in the South have also been impacted, and with them the industrial zones of Bing Doung. Factories are operating in isolation where they are given permission to under the “3 on-site” model, which means workers can live and work on-site, or at least be transported in a bubble from a single separate accommodation location to the factory site to work and back at the end of their shift. The target date of 15th September for the local economy to be re-opened may perhaps be a stretch, but with a significant vaccine drive and severe lockdowns, there is still hope.

India

The devastation that the Delta variant had on India back in May, when new cases peaked at just under 415,000 in one day, was hard to watch. Cases have now ameliorated to a 7-day average of approximately 40,000 per day, 10% of the cases back in May. Manufacturing has opened up and factories are largely operating again. There are still challenges with shipments, but that is not solely a local Indian issue.

Turkey

Turkey is currently benefiting from its proximity to Europe with the high freight rates. The manufacturing sector has largely managed to remain open right up to Ramadan back in April. Even though cases were up as high as 60,000 per day, these have since settled to a third of that figure as a result of lockdown measures and also a successful vaccine drive.

Two plus Two equals Zero

It is a difficult picture to pull together with any sense of predictability, which makes decision-making that much trickier. Global supply chains are cumbersome and not easily uprooted. It takes time, and with the Covid-19 appearing in different places at different times, it is not easy to plan anything. The one predictable piece of this puzzle is the predictability that there will be some kind of disruption within global supply chains.   This Monkey is not going anywhere soon and the simplest advice we can give is:

  • It will benefit companies to build in additional flexibility. Look at different provinces, different regions, different markets.
  • You need ‘boots on the ground’ to react quickly to any incident as it appears.
  • Keep your options open.

We are heading into the busiest time of the year for the shipment of products out of the East, and the current environment is most certainly going to result in stock shortages during the festive season as well as not-insignificant inflationary pressures (see our petition for the UK Government to counter these inflationary pressures).

Summary

At ET2C, our solutions are centred around flexibility.  We provide our clients with access to a range of markets and suppliers on the ground across Asia.  We are well placed, as your Sourcing Partner, to help you during these difficult times. For more information, please contact us at contact@et2cint.com.

Global Supply Chains & Covid-19 Read More »

Outdoor Furniture and Garden Trends 2022

Industry Insights / / , , , ,

Outdoor Furniture and Garden Trends 2022 ET2C International sourcing

 

Outdoor Furniture and Garden: as new habits emerge from the Pandemic, new trends will point towards the design of the outdoor space.

As we did last year, we are ready to predict some interesting outdoor and garden trends for the next spring-summer season.

The past 18 months have introduced many new behaviors, which have led to new trends in the outdoor furniture and garden sectors. As a direct consequence of the many lockdowns, the consumer started to design their living space in line with the adoption of these new habits and ultimately a greater reliance on time spent in their homes.

Of course, the Outdoor Furniture & Garden sector does not have a fast turnover of trends, when compared with fashion as an example, so we anticipate some SS21 trends to follow through into the next season as well. Look out for “Outdoor as Indoor”, Urban Gardens and Permaculture and the use of Natural Materials that are likely to feature in SS22.

Outdoor and Garden Trends SS2022

Vertical Gardening

The long periods of lockdown made us reconsider the importance of outdoor space. Even those people that do not have access to a garden, but just to a tiny balcony, now enjoy more than ever to spend some time outside and they certainly want to get the most out of what they have. For this reason, many opt for a vertical garden (even indoor!), in order to create a nice green corner with the (little) space available. This type of solution makes the balcony look bigger, adding a pleasant natural touch to it.

vertical garden sourcing ET2C Int procurement

Recycled materials

Recently, the topic of sustainability has been becoming increasingly important in any industry. This also applies to garden furniture. Last year in particular, the demand for sustainable garden furniture rose sharply. Surely, this trend will continue in 2022.

Both designers and consumers are now seriously paying attention to sustainable materials and environmentally friendly design outdoors.

More and more, garden furniture is made from recycled materials. Certainty, this trend already started years ago: for example, the tropical wood such as teak or acacia, which is extracted from old boats and houses, has been recycled in the garden furniture sector for several years.

plastic furniture suppliers recycled materials sustainability sourcing procurement

But recently, this process has involved also the making of plastic furniture. In fact, we can see now that seat shells or even complete lounge furniture are made from plastic collected and processed from land and sea. So if you want to focus more on sustainability when designing your terrace, you will find furniture made from recycled raw materials more often in the coming season. This way you not only decorate your garden with the latest outdoor trends, but also have a positive impact on the environment.

Furniture made of Rope

We also anticipate a broad use of rope in our gardens for the next season. In fact, to many people’s surprise, the practice of using woven rope to create furniture is a tradition that dates back to ancient times in Egypt. This material is versatile combining strength, flexibility and comfort!

rope furniture sourcing procurement style suppliers

Certainly, garden furniture made of rope gives your garden a particularly chic and modern look. An added advantage is that rope is very weather resistant come rain or shine. For this reason, furniture made from woven rope can be an especially good choice for people looking for items they can leave outside all year round.

Natural Colours & Materials

Now more than ever, the outside space is designed to be efficient and comfortable at the same time. Therefore, in order to be able to relax and unwind in the garden, natural fabrics and colours are becoming increasingly common. Muted tones such as sage green, cream, cashmere or beige will be particularly popular. Be ready to also see a lot of subtle green, brown and gray natural tones, but also khaki, olive green, ivory and foggy gray.

outdoor furniture sourcing procurement suppliers vendors trends style ET2C Int.

If you are not sure about how to develop your “garden palette”, simply choose one of these colors or combine several tones. This creates soft areas of different colours that immediately enhance any outdoor space.

Bohemian Touch

While natural tones will decorate most of the outdoor space, accessories, in particular, will create a nice contrast that will add a twist to your balconies, patios, and gardens.
The bohemian style will play a key role in this, especially on cushions, pillows, and accessories. Textiles will come up trumps with exotic, folkloric ethnic patterns and the furniture itself will show its ornate side in natural materials.

Bohemian style outdoor design suppliers procurement sourcing ET2C Int.

Whether rattan furniture, teak furniture decorated with carvings or ‘chilled’ hanging chairs – the furniture trends in 2022 will exude the artistic bohemian charm. Furthermore, colorful carpets and pillows with pompons and tassels will provide your minimalist/natural furniture with a lively boho-chic flair.

Urban industrial jungle

Recently, we have seen how the outdoor space has been designed as an extension of the internal living space. Specifically, we have seen it replicating some designs or even imitating the living room furniture.
However, for next season there will be a progression of this trend with the boundary between ‘interior’ and ‘exterior’ largely disappearing or becoming barely visible.

In fact, the outdoor space will include more elements from outside such as the ‘street’ style and even the wild jungle, without excluding some notes of industrial design.

Urban industrial jungle style design garden bicycle purple

In 2022 you will discover the simplicity and simple visual, which is inspired by the look of old warehouses, factories and other industrial buildings, also on the terrace.

However, these elements will be harmoniously combined together. For example, they will reach a perfect balance with furniture pieces that combine sturdy aluminum and natural teak. Certainly, the aluminum – that is rust-free and gives your garden a modern look – will be perfectly complemented by the naturally warm appearance of teak.

A good choice of exotic flowers and plants will add some jungle touch, complemented by some trendy Savanna-style cushions and decorations.

However, the mix of the different styles will be perfectly balanced in a general minimalist décor. So do not expect to find these elements all mixed together randomly or in excessive quantities. Garden furniture with a minimalist design will play a key role to give an elegant and relaxing look to the outside space. On the other hand, the accessories will create a nice contrast.

Sourcing Furniture and Outdoor, we can help!

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

Outdoor Furniture and Garden Trends 2022 Read More »

Turkey Manufacturers: A Near Sourcing Alternative for Textile Products

Industry Insights / / , ,

Turkey Manufacturers ET2C Int. Sourcing Procurement Suppliers

Turkey manufacturers are well-positioned to complement your supply chain with their proximity to the EU market.

The country has a broad and established manufacturing base which sits on the edge of Europe. This is important from a ‘near sourcing’ perspective and provides an alternative sourcing option for UK/EU companies. This is particularly true at present given the current spike in freight rates on the main trade routes out of Asia. Having an alternative near shore option will mitigate the high freight rates as well as shorten lead times considerably.

Sourcing Textiles

One of Turkey’s key export industries is the textile and apparel sector, which has been a very important driving force for the economy in terms of GDP and employment. These sectors accounted for 17% of the country’s exports in 2019. As a part of global trade, Turkey is one of the main actors in the apparel industry as the 7th largest supplier in the world, and the 3rd largest supplier of the EU, which has high standards and sophisticated customer needs with the top five foreign markets for Turkey’s exports being Germany, Spain, UK, Netherlands, France.

There are many reasons why Turkey manufacturers are ranked so highly:

• Low labor costs are a significant advantage when compared with European producers, and the labor cost is obviously a significant part of the Bill of Materials for “cut and sew”.

• Cotton production – As the seventh-largest cotton-producing country in the world, Turkey has access to an uninterrupted supply of cotton, which is the main raw material dominating the textile market owing to its features like high absorbency and strength.

cotton sourcing Turkey ET2C Int Sourcing suppliers

• Proximity to European markets – short lead-times – With many retailers demanding products with short lead times, Turkey has a big advantage with its proximity and can react more quickly; a key aspect of the fashion industry.

• Sustainability – Turkish production complies with international ecological standards, such as the prohibition of the use of harmful dyes.

• Its skilled workforce, modern production equipment, and national infrastructure also guarantee a sustainable competitive advantage.

Turkey manufacturers also have an advantage of an agreement with the EU which removes tariffs and duties on most goods. This also reduces the landed cost price further.

Main Categories

Within the textile and garment sector, there are a range of categories.

Garments

As the main center for clothes, Istanbul prides itself on its designers, fashion, and shopping malls; where you can find the harmonious mixture of the West-East, and Old-New. Due to recent domestic and foreign investments, Istanbul is fast becoming a fashion hub.

clothes sourcing Turkey ET2C Int Sourcing fashion apparel

As a global sourcing center that is in both Asia and Europe, Istanbul has attracted the attention of many international fashion sourcing offices, trading companies, and major retailers and department stores. Since Istanbul became a commercial and fashion center, most manufacturers have moved production facilities to inner regions. Izmir, Bursa, Ankara, Denizli, Gaziantep, Kayseri, Tekirdag, Adiyaman, Kahramanmaras and Adana are now the main cities for the production of knitted and crocheted garments.

Carpets & Kilims (Rugs)

The history of carpets dates back to the 3rd and 2nd Centuries BC. They were introduced to world civilization by Turks as a decoration item for walls and floors, the earliest samples of which have been found in Central Asia. This is an art form that the Turks discovered, developed, and introduced to the world as they traveled across vast regions. Since the mid-15th century, Turkish rugs have been highly praised in Europe and played an indispensable role in European social life, even depicted in the paintings of the time and regarded as a status symbol. Today, Turkish carpets and kilims from the Ottoman Empire are displayed in the most prestigious museums. Turkey continues the tradition of hand-made carpets and rugs with ornamental motifs and different weaving types, exporting them to a wide range of countries.

Rug textile Turkey manufacturers ET2C International sourcing

In the meantime, machine-made rugs and carpets are also not neglected. Their durability, colorfastness, anti-soiling finish, ease of cleaning, and antibacterial properties made Turkey one of the biggest suppliers in this sector. Manufacturers continue to introduce new trends, a variety of different types of carpets, innovative designs, and colors to the world market.

Footwear

The Turkish footwear industry has developed very quickly due to modern manufacturing techniques, quality raw materials, qualified workers, and high design capabilities. It has a powerful position among exporters of high-quality fashion goods. About 70% of the production volume of the sector is carried out in a semi-machine manufacturing process, and approximately 15% of the manufacturing is manual. In 2019, the production of Turkish shoes has reached more than 392 million pairs, including sneakers, boots, plastic shoes, and slippers. The production of military boots and work safety shoes has also considerably increased in recent years.

Today, the Turkish shoe industry has the ability to create its own brands and styles. The performance of the industry is highly dependent on exports, with the main markets being the Middle East & Europe.

shoes footwear sourcing Turkey ET2C Int Sourcing

 

Home Textiles

The Turkish home textile industry now plays an important role in world trade with its ability to meet the high-quality standards of all sophisticated consumers.
Nearly all types of home textiles are manufactured in Turkey: towels, bedsheets, bedspreads, curtains, blankets, pillows, quilts, cushions, eiderdowns, table linens, lace, and sleeping bags.

The largest quilt factory in Europe is located in Turkey. In addition, the industry has managed to reduce production costs below the world average while improving product quality and carrying the tradition from the past to the present.

home textiles sourcing Turkey ET2C Int Sourcing

To meet the demand for environmental protection within the international market, Turkey also provides traditional fabrics made from pure cotton or linen without the use of chemical dyes. At present, the Turkish home textiles industry has realized the growing demand for healthier and more environmentally friendly products in the international market and has rapidly adapted to the development of legal and technical regulations.

Leatherware

The history of the Turkish leather industry can be traced back to 500 years ago. The production of this sector is based on modern technology and historical background. Today, the industry has a worldwide reputation for its well-designed and stylish products.

Although initial efforts to modernize the leather industry began in the 1970s, significant progress on the real industrial scale began in the mid-1980s. In recent years, this field has shown rapid progress. Today, production meets international standards and environmentally friendly production policies are highly valued: around 90% of production is based on health and environmental standards.

Leatherware sourcing Turkey ET2C Int Sourcing

The technological advancement of this industry is vital to a highly competitive industry and is growing rapidly. Today, the Turkish leather industry exports its own leather. Now, the industry is beginning to pursue value-added and advantageous innovation, branding, and design.

Turkey’s leather garment industry produces the best quality leather garments for men and women. Most of the major companies in the industry are producing original collections under their own brands. The industry creates its own fashion using unmatched quality colors, patterns, manufacturing processes, and materials. Due to these characteristics of the industry, Turkish leather clothing products enjoy a high reputation and are appreciated all over the world.

Turkey Manufacturers – Our Network

Turkey manufacturers are well positioned to add to your supply chain across a broad range of categories – particularly when freight rates are so high. The Textile & Soft goods sectors are well established and provide a near sourcing option for UK and EU companies looking to source closer to their own markets.

At ET2C, we are well placed to help manage your sourcing needs across multiple markets with teams on the ground. For more information on how we can help you with your Turkey sourcing or for other markets, please contact us at contact@et2cint.com.

 

Turkey Manufacturers: A Near Sourcing Alternative for Textile Products Read More »

Get In Touch

Want to know how ET2C can help your business? Get in touch today and we’ll show you how.

Contact Us

Case Studies
Sustainable Packaging
Read More
Virtual Factory Tours
Read More
The Benefits of ET2C's Buying Office Solution
Read More
Third Party Quality Control
Read More
Sourcing Services for a Young Growth Company
Read More
Leveraging Benefits of Asian Sourcing
Read More
View All

Our Thinking

View some of our latest blog posts below.You can see all of our posts by clicking the button below.
The Challenges in Sourcing High-Quality Melamine Tableware: What You Need to Know
Read More
Why South American and Mexican Retailers Should Source Toolboxes and Organizers from Turkey: Key Advantages Over China
Read More
The Growing Global Sourcing Demand for Toolboxes and Organizers: A Multi-Industry Surge
Read More
View All

Providing your business with enhanced sourcing and procurement solutions since 2001.

Explore

Recent News

Signup To Our Newsletter

© All rights reserved ET2C

Scroll to Top