Labor deficit impacts industry

	These stoneware mugs from Biansebao change color according to liquid temperature.

Companies are increasing MOQ requirements to build up order feasibility.

China’s promotional mugs and cups makers are taking steps to adjust to the current worker shortage.

Among these, many suppliers are increasing their MOQ. This is because small orders of buyer-specified patterns necessitate the same expense and time during sample development as larger ones, possibly raising outlay to prohibitive rates.

For ceramic and porcelain models, required amounts are currently at 2,000 pieces or 300 percent more than previous levels. At least 3,000 stainless steel products must be procured now, as opposed to just 1,000 in 2009.

While the majority of companies are placing greater emphasis on large orders, these often need to be delivered in several batches if the shipment is urgent.

Previously, rush purchases were handled by hiring temporary workers.

In general, production time has gone up by 30 percent from last year. Manufacturing costs are also higher, as makers are forced to raise salaries to keep workforce at current levels.

After the 2010 Chinese Spring Festival, about 70 percent of companies experienced difficulty in finding enough staff to ensure full operation.

This development was significant for suppliers of mugs and cups in ceramic and porcelain. Such models require more manual processes than versions in alternative materials.

As a result, most companies are currently maximizing their production capability, making it unfeasible for prospective customers to negotiate price cuts for large orders.

The labor shortage is expected to continue in the next six months, with some suppliers even forecasting a duration of several years.

	The model SZB05-375 beer mug from Shanxi Sunny is made of glass with a frosted finish.

Many China suppliers will be boosting product aesthetics in an effort to improve competitiveness.

While traditional shapes are expected to remain dominant, a number of companies will be releasing fresh contours, especially for plastic, ceramic and porcelain models.

The latest ceramic and porcelain mugs from Putian Municipal New Developing Gift Co. Ltd bear a 3D cow motif.

Other suppliers have released drinkware in cartoon designs.

Biansebao Arts & Crafts Fty (HK) Ltd offers ceramic and porcelain pieces that change color and exhibit buyer-specified images according to water temperature. Some even play music when hot water is poured.

At Shenzhen Iking International Ltd, LED bulbs are employed to increase product differentiation. The resulting rainbow patterns can be activated manually, or by sound or temperature.

In addition, double-layer porcelain and ceramic mugs are available from the company. This construction keeps the exterior cool to the touch while retaining heat longer than traditional versions.

Due to the limits of current processing methods, innovation in the stainless steel drinkware segment is mostly on physical characteristics such as diameter and height. Efforts are also being made to improve surface treatment techniques.

A range of methods is employed for logo application.

Silk-screening and transfer printing are popular options for all material types. These allow vivid multicolor images, are easy to perform and have competitive costs.

For plastic mugs and cups, embossing and debossing can be done. Such techniques result in 3D designs.

Laser engraving, on the other hand, is typically utilized only for stainless steel drinkware. It adds value and imparts permanent patterns but does not colorize logos.

More than 80 percent of China companies interviewed for this report anticipate price increases in the next six months.

Values are expected to be 10 to 20 percent higher than the corresponding period in 2009.

Many suppliers see changes in material costs as a major cause of the quote modifications.

Stainless steel reached $3,578 per ton in April. This was $73 or 2 percent more than the previous month. Expenditure for the metal accounts for 80 percent of total production outlay.

PVC is the main plastic type employed in promotional drinkware. While costs were stable throughout March, they are expected to surge as a result of higher demand.

The outlay situation is similar for glass, ceramic and porcelain.

Inflation rates and the revaluation of the yuan are the other factors behind the anticipated price increases.

	Zhejiang Bangda offers the model BES-5581 sports flask, which is made of stainless steel.

There are between 5,000 and 6,000 manufacturers of promotional mugs and cups in mainland China. The distribution of suppliers is even across the ceramic and porcelain, stainless steel, glass and plastic product segments.

Regardless of material preference, the majority of makers have direct export rights. There are also 2,000 to 3,000 trading companies that focus on the line.

Most operations are locally owned private entities. About 10 percent of the entire supplier base consists of specialists in plastic and stainless steel with Hong Kong and Taiwan investment.

At small companies, employees number less than 50.

Production processes are subcontracted. Midsize makers account for the bulk of the industry. These have between 50 and 100 full-time workers. Nearly all procedures, including mold setup, plastic injection and logo application can be done in-house.

Large companies boast up to 200 employees. They usually do not specialize in the line, offering other products in the same material.

There are several sourcing centers for promotional drinkware in China.

Glass mugs and cups are mainly manufactured in Shaanxi and Shanxi provinces. There are also trading companies based in these areas and Qingdao of Shandong province.

Models from the hubs are aimed at the low-end and midrange segments, and together account for more than half of the country’s total in the line. Various designs, including transparent, frosted and hand-applied patterns, are available.

Many of China’s promotional mugs in stainless steel are produced in Yongkang, Zhejiang province. Releases are usually in travel or vacuum configurations.

Pieces from Chaozhou and Jieyang of Guangdong province, on the other hand, have basic single-layer constructions with lids, and are targeted at the low-end and midrange markets.

Companies in these areas offer metal kitchenware and cooking utensils as well.

Ceramic and porcelain mugs are mainly produced in Quanzhou and Xiamen, both in Fujian province. The former is a traditional sourcing center for arts and crafts in the same materials.

Leveraging the advantages of the coastal location, many suppliers have factories in Quanzhou and neighboring cities while operating sales offices in Xiamen.

Promotional drinkware from Fujian is usually midrange and boasts aesthetic attributes often seen in arts and crafts.