Export chopsticks to China [Updated, May 2012]

By Jackie, Researcher

Type of business industry: Manufacturing

Product: Disposable chopsticks

Target market: China [major]; Japan & Korea [minor]

The objectives of this research are to identify which commodity can easily penetrate into China’s market successfully, the reasons behind it, the issues involved in this business activity, and demographic analysis of certain locations in order to get the sources of production.

Introduction

Nowadays everywhere around the globe, you can almost easily spot “made in China’s commodities”. With the population size of 1.3 billion, the Chinese almost manufactures everything and successfully penetrate into every country’s market with its golden formula: low labour cost. However, have you ever thought of some products that are needed by them of which other countries can manufacture it and sold to them? In short, what are those essential products that can penetrate into China’s market?

Answer: Chopstick

When I said this to my colleagues, 6 out of 6 roll on floor laughing and saying back to me, “Jackie, you are crazy”. Oh well, this basically indicates that most of the people are still not concern and aware of this type of business. I got this idea through reading National Geographic’s magazine few months ago and because the information given was restricted, I have to do my own research by searching other business journals and magazines as well. After months of analyzing it, I have successfully identified this type of business’ potential too.

Sushi King : "This chopsticks are made from natural wood and are not processed with any bleaching agent"

True, but strange!

Did you know that even now, China is importing chopstick from other countries? I know how you feel now [same as mine when I was first introduced to this matter]: strange. The first reason is simple and straight-forward. China uses 45 billion disposable wooden chopsticks a year, but the country has a very low lumber resource (CBS Evening News, 2011). Well, this point is arguable because chopsticks are not necessary have to be made using timber. Bamboos can be used as its substitute [and China is rich in bamboos]. Another strong reason is due to China’s National Logging Ban [issued in 1998] to preserve and conserve their natural forests from being over use. They actually observed and know that their forests were slowly degrading and deteriorating which are mainly resulted from unsuitable and unsustainable management strategies and methodologies. [See reference 1] 

A brief summary of real case study on Georgia’s Chopsticks Company:

Georgia Chopsticks Company manufactures roughly four millions of chopsticks daily and exports them to China and Japan. The main idea is China and Japan have insufficient wood to produce their own chopsticks, but Georgia has. The owner, Lee started the business when he heard that China has a moratorium on domestic tree cutting in order to protect its dwindling lumber resources. The abundant poplar and sweet gum trees in Georgia were found to be ideal for producing straight, pliable, and light coloured chopsticks. Each pair of chopstick is less than a penny to be made. Georgia Chopsticks is the only one, America’s chopsticks manufacturer in the United States. The owner is planning to produce 10 million chopsticks daily by the end of 2012.

Tee Kendrick, left, and Toriano Jenkins roll up chopped wood for further cutting.

Esteban Fabela peels away the bark from a steaming log.

Chopsticks are moved on a conveyor belt.

A worker loads boxes of chopsticks onto a shipping container.

Issues and threat to set-up such business

1. Law constraints

    For example, China’s National Logging Ban [issued in 1998] to preserve and conserve their natural   

    forests from being over use whereas some countries require tree loggers to apply ‘logging license’ before 

    logging process starts. Normally tree cutting restrictions apply. However, not all type of trees can be cut 

    down because some trees are protected species.

2. Type of wood used 

    Ideally, the wood should have pleasant colour, texture and appearance: milky white. Based on my 

    observation, although country like Malaysia has high quality timber [as it is located in equator line] but the 

    wood is not suitable to make chopsticks as the colour of those wood are usually darker as compared to 

    Georgia [Malaysia’s timber are usually used to make furniture and outdoor landscape design]. 

3. Plastic, bamboo, or metal chopsticks as substitute

 This is the most worrying threat to this industry. However, some chopsticks users have commented that 

 using plastic chopsticks to eat hot food will somehow triggers the plastic’s chemical reaction which is 

 harmful to our body, resulting in food poisoning. Meanwhile, using bamboo is quite troublesome as it is 

 mandatory to remove its stingers first, and hence extra steps are needed before turning them into 

 chopsticks. Finally, it is very unlikely that the Chinese, Japanese nor the Korean will use metal chopsticks 

 to eat their food. The reason is simple. It is heavier and it is a heat conductor; it will transfer the heat from 

 the food to the users' fingers.

4. Environment factor

 As the business goes on, it will require more and more trees to be cut down. Thus, this is not a 

 environmental friendly business. Besides, the present of non-government organization (NGO) as well as 

 environmental conservation and protection groups will pose additional threat too.

Business Potential

According to Economics’ theories, this type of business has an extremely bright future whereby you can actually see the Georgia Chopsticks Company being the only one chopsticks manufacturer in America. This is so called: monopoly. The demand for chopsticks will rise in the future due to the increase in demand mainly in China, Japan and Korea. Eating using chopsticks are part of their culture and tradition. It is clearly noticeable that disposable chopsticks are often used in restaurant like Sushi King, Teppanyaki, and Chinese restaurant as well. This is however; very seldom people will go into this type of business as the work is too tedious. 

Additional readings and references:

Challenging the national logging ban in China: An Experience of community-based natural forest management in Sichuan province.

http://www.fao.org/DOCREP/ARTICLE/WFC/XII/0098-C1.HTM

China’s large-scale afforestation projects, importing timber from west and central Africa, combating illegal logging, implementing new laws and customs monitoring.

http://www.illegal-logging.info/approach.php?a_id=28

Georgia’s Hottest Export: Chopsticks!

http://www.thedenverchannel.com/news/29932489/detail.html

Fox News Channel: GA Chopstick Company exporting products oversea to Asia.

http://www.youtube.com/watch?v=x68s3qwiUcY

[CBS Evening News with Scott Pelley] Mark Strassman reports on how South Georgia, with its lush forests of sweet gum trees, has built a factory manufacturing and selling chopsticks to China.

http://www.youtube.com/watch?v=-KmALZWHgbQ

US factory exports chopsticks to China.

http://www.youtube.com/watch?v=6lgYqWappfk&feature=related

Notes: Pictures courtesy from google search.

All information is accurate at the time of posting.