School stationery sets

	The KT-NB475 model from Kingtoy is a mini notebook and ballpoint pen set.

Emphasizing R&D and production capability helps makers in this city boost efficiency and in-house design work.

Substantial investment in manufacturing upgrades and R&D has fueled the steady growth of the school stationery sets industry in Ningbo, Zhejiang province.

Allocation for equipment acquisition and product development over the past several years has reached almost $440 million. The city now boasts some of the most sophisticated technologies in the line, including precision molding, chemical processing, electromechanical integration and surface finishing.

Nearly 90 percent of Ningbo’s large enterprises have in-house R&D teams. Certain companies earmark up to 5 percent of total sales annually for various targets, including broadening their materials selections.

Meanwhile, other suppliers explore means to increase production efficiency. Recent advancements include an additive that extends a color powder’s yield. Traditionally, one kilogram of the material produces about 10,000 crayons. With the new ingredient, plants can now turn out about 20,000 pieces, cutting manufacturing costs by as much as 15 percent.

Small and midsize companies, on the other hand, are enhancing their capability to create in-house cartoon characters. They collaborate with key players in the local animation industry such as Zhejiang Zhongnan for this endeavor. Some large operations already have their own artists developing proprietary figures.

Such an approach helps minimize reliance on OEM orders driving design work. It also breaks the monopoly some multinationals, including Disney, have on cartoon and other youth-oriented themes.

There are about 2,700 enterprises in Ningbo offering stationery products, accounting for 70 percent of China’s entire manufacturing base. Of these, 300 are trading companies.

Small and midsize operations dominate the supplier pool. About 30 of them have annual sales exceeding $7.3 million. The city is also home to several large enterprises recognized particularly for one or two stationery types.

In addition to school-use models, Ningbo’s stationery selection includes writing instruments, filing accessories, painting tools, and various office and paper products. Prices of low-end models are from $0.30 to $1, while midrange designs reach $2. The high-end line goes up to $3.50. Quotes are 5 percent lower than in other hubs.

Production of school stationery in the city is export-oriented, with 80 percent of output shipped to North America, the EU, Japan and South Korea. More than 30 percent of China’s total overseas business in the line comes from Ningbo.

The segment, however, was not spared from the recent global financial crisis. Demand from international markets, especially the US and the EU, has been declining.

This trend has forced at least 10 percent of Ningbo’s supplier base to close or shift to other product lines. Consequently, capacity utilization dropped to about 30 percent this year from more than 60 percent in 2008.

To mitigate the situation, surviving suppliers are exploring the domestic market as an alternative. Earlier this year, the 6th China International Stationery and Gifts Exposition was held in the city to attract local buyers.

Moreover, to facilitate technology and resource sharing, some companies join organizations such as the Ningbo Stationery Trade Association. Established in 2003, the NSTA is a nonprofit group that aims to provide brand cultivation and corporate advertising services to members. It also spearheads trade exhibitions at home and abroad to promote the line further in international markets.

With buyers leaning toward bundled products, some Ningbo companies are pooling together their selections. As an example, watercolor pen makers work with desktop stationery suppliers to meet orders for school sets, which usually include scissors, rulers and erasers.

Some large suppliers diversify to other services such as logistical and sourcing support to overseas clients. They provide transshipment and partial shipment of landed containers, with some offering delivery to retail stores.

These strategies have created inroads into new and diverse markets within China and overseas, allowing the line to bounce back gradually. In fact, school stationery manufacturing in Ningbo is forecast to increase by about 7 to 10 percent by year-end.