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.
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.
China’s large-scale
afforestation projects, importing timber from west and central Africa,
combating illegal logging, implementing new laws and customs monitoring.
Georgia’s
Hottest Export: Chopsticks!
Fox News
Channel: GA Chopstick Company exporting products oversea to Asia.
[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.
US factory
exports chopsticks to China.
Notes: Pictures courtesy from google search.
All information is
accurate at the time of posting.
