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China makers of standard battery chargers are diversifying to more lucrative lines amid fl at growth in past months. After rebounding by less than 5 percent in 2009, demand is expected to remain unchanged this year. Profit margins are also declining as costs increase but prices fall due to fierce competition. Suppliers are shifting to sets consisting of a charger and NiCd or NiMH batteries since those producing the latter offer the first as well. This combination, which is mainly for the retail market and used to be the dominant application, is proving to be more profitable than industrial models. It is targeted at manufacturers of electronic devices.
For many manufacturers, however, expansion plans are on hold with utilization already running at 60 to 70 percent. Some are even leaving the line altogether to concentrate on high revenue products such as adapters and switching power supplies.
Growth from these sectors is more secure as China’s power supply market generated $2.5 billion sales in 2009, according to CCID. This is an increase of 4 percent over the previous year’s $2.4 billion. The industry is predicted to continue swelling in the next two years, reaching $2.7 billion in 2010 and $2.9 billion the year after.
Standard battery chargers, which account for 10 to 20 percent of makers’ total output, are shipped to Europe, North America, Southeast Asia and the Middle East. The first two are still the most important destinations for many local companies as buyers from these regions favor upscale models, which yield bigger revenue. A growing number of players, however, are exploring India and Southeast Asia. Demand from these areas is mostly for low-end units but suppliers count on the large quantity of orders to ensure higher returns. |
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