Tougher chemical requirements under the new EU Toy Safety Directive that will take effect in July are expected to increase pressure on toy exports to the EU, exporters told the Global Times Wednesday.
Exports to the EU have already taken a hit amid sluggish demand, higher labor costs and a rising yuan, and the tougher chemical restrictions would add to quality assurance costs for toy manufacturers, Liu Ziqin, manager of the toy department at Jiangsu High Hope Zhongding Co, told the Global Times Wednesday.
The EU is currently the company's second largest toy export destination after the US, according to Liu, who disclosed that some EU clients have already requested that the company's toy production be in compliance with the new rules.
The overall operating costs of the toy business are estimated to rise roughly 10 percent over the next year after the new requirements come into force, Liu said, and "production time will be prolonged as well due to stricter quality check procedures."
She also stressed that export orders and profits will therefore likely shrink further. Liu's company had considered transferring its toy plants to Southeast Asian countries to cut manufacturing costs, but has yet to do so due to a lack of the materials and facilities required for toy production in those countries.
Except for the chemical requirements, the general provisions of the new EU Toy Safety Directive took effect on July 20, 2011. The chemical provisions, which include restrictions on toxic elements and certain fragrances, will take effect on July 20 this year and are the EU's toughest rules on toy safety to date.
EU companies have been undercutting prices of China-made toy products, and the tightened rules would make it tougher to export to the EU, a staffer surnamed Liu with the international business division of a toy manufacturing company in Dongguan, South China's Guangdong Province, told the Global Times Wednesday on condition of anonymity.
In recent years, the EU toy market has increasingly raised the bar to entry, which helps improve the global toy industry but also raises costs for toy manufacturers, the China Business News reported Wednesday citing Zhao Mingqiao, an expert with the Guangdong Testing Institute of Product Quality Supervision.
The new requirements under the directive are likely to have a heavy impact on toy exports, Zhao said, forecasting a 5 to 10 percent rise in companies' costs across the sector.
In the first five months of this year, China's exports of toy products rose by 2.7 percent year-on-year, slowing down from the first four months.