Firms deal with stricter environmental controls

SINGAPORE: Lindy Li, overseas sales engineer of Shenzhen-based Success Electronic Co Ltd, thought it was the fast response from her company that saved it from the possible loss of its overseas markets.

Faced with the prospect of a number of important markets imposing stricter environmental controls on imports, Li's company took steps to improve its production processes and quality control.

Acting in such a timely manner three years ago not only helped Success Electronic Co avoid elimination from the European market, but has actually helped it to grow into one of China's major LCD manufacturers, she said.

As one of the largest electronics manufacturers in the world, more and more of China's export-oriented electronics firms are facing the challenge of new and tighter export directives.

This year's introduction of the European Union's Reduction of Hazardous Substances (RoHS) Directives has forced developing nations such as China to start changing outdated manufacturing processes.

RoHS, which came into force on July 1 this year, restricts the use of six hazardous materials in the manufacturing of various types of electronic and electrical equipment.

In order to avoid losing vital overseas markets, many firms have started to seek solutions and learn how foreign counterparts have managed to cope with these stricter standards.

"We now pay greater attention to the suppliers of our raw materials," said Li at GlobalTRONICS 2006, one of Asia's largest electronics manufacturing industry trade shows, which ended yesterday in Singapore.

"We ask them to meet the requirements of our clients first by deleting hazardous substances, then we further reduce them in our manufacturing process," she said.

Raymond Hui, marketing manager of X&Y International Industrial Co Ltd, a manufacturer of anti-electrostatic products also based in Shenzhen, said: "We heard of the stricter standards a few years ago, but trying to comply with them is proving to be a tough job."

Ed Ng, president of Reed Exhibitions and organizer of GlobalTRONICS, said stricter standards such as RoHS, which many countries will adopt in the future, are a major challenge for China, currently the world's largest manufacturer of electronics products, with 16 per cent of global electronics output.

"Companies which currently fail to comply with RoHS can export to the other countries, but when these nations, such as the United States and Japan, gradually adopt the same standards, they will possibly lose their entire overseas markets," said Ng.

"Attempting to comply with these standards will force manufacturers to seek the compliance of the whole value chain, such as raw materials, processing and logistics," he said.

A total of 40 Chinese electronics firms were among the 500 exhibitors from nearly 30 countries taking part in this year's GlobalTRONICS.

Apart from showcasing a full range of products and services, this year's event also provides information about lead-free manufacturing and materials, as well as processes that use fewer hazardous substances.

"Companies which fail to comply with the standards will suffer from huge losses if foreign clients return all of their products," said Jessy Peng, marketing co-ordinator from Taiwan-based Troy Enterprises Co Ltd.

Source: China Daily