Manufacturing activity drops 30% due to piracy, competition from China

Stiff competition from China and unabated imitation and piracy have resulted in a 30-percent drop in local manufacturing activities.

This was disclosed yesterday by one local manufacturer of licensed cartoon characters.

According to Steven Ching, president of Characters Unlimited, shipments of manufactured products from China are 30 percent to 40 percent lower than locally-made products, resulting in the influx of imported goods from that country.

"China also offers lower labor cost as well as material cost," Ching said, adding that "China has its own sources of raw materials such as leather while the Philippines has to import a lot of its raw material inputs."

Imitation and piracy, Ching said, also erode the market share of local manufacturers.

"A lot of local manufacturers are just seriously thinking of importing from China instead of producing locally," he said.

Characters Unlimited, Ching said, had experienced labor problems recently and was forced to close down two of its factories.

The closure of the two factories resulted in the layoff of around 500 workers.

Despite such problems, Ching said, Characters Unlimited has chosen to persevere by now engaging in subcontracting.

"Characters Unlimited also engages in retail store operations which continues to be profitable," he added.

Characters Unlimited is licensed to manufacture products using characters of Snoopy, Barbie, Garfield, Sesame Street and Robby Rabbit.

Imitation and piracy have also aggravated the situation, resulting in a 20-percent to 25-percent drop in Character Unlimited sales this year.