KUALA LUMPUR: Cookware producer Ni Hsin Resources Bhd is expecting China to become the company’s largest export market and take over the pole position from Japan.
Company managing director Chen Shien Yee expects 50% of turnover to come from China in three years. Besides Japan, Taiwan and South Korea are the next biggest export markets for the company
“Assuming we hit the 40mil yuan target which is RM26mil in three years this will translate to 50% of our current turnover,” Ni Hsin Corp Sdn Bhd managing director Khoo Chee Keong said.
Ni Hsin signed an exclusive distributorship agreement with China’s Mingkeda Group Holding Co Ltd to export cookware and convex mirrors.
The exclusive distributorship agreement with Mingkeda will have a tenure of ten years.
The agreement will see Ni Hsin exporting a minimum order quantity of 10mil yuan for cookware in the first year, rising to 20mil the following year and 40mil in the third year with the amount from the fourth year onwards to be agreed upon at a later time.
The minimum order quantity for convex mirrors in the first year has been set at 2 million yuan (RM1mil), second year 4 million yuan (RM2mil) and the third year 8 million yuan (RM5mil) while the fourth year onwards will be mutually agreed upon at a later time.
“After the three years, both of our companies would have to sit down and renegotiate the minimum order quantity.
“Let’s say it doesn’t do well as expected then we would have to adjust based on the situation or vice versa,” Chen said.
At the signing of the distributorship, Mingkeda said that it will mainly use the e-commerce channels to push these products out to the masses in China.
Mingkeda, based in Shenzhen, was established in 1991 with businesses comprising home appliance wholesale and retail, maintenance and installation, warehousing and logistics, property development and management.
Khoo said despite the many original equipment manufacture (OEM) cookwares in China, the company could still compete there.
“With the strong sales network by Mingkeda in China we believe we can compete with the other brands that are available in China,” he said.
Meanwhile, Chen said Ni Hsin will expand their market reach to two new countries this year: in the US and Russia.
“We are going to participate in the food fest in the US in the middle of this year. While for the Russian market we would like to sell our convex mirrors there as we have built up our reputation for our convex mirrors in Japan,” Chen said.
“In Japan, our convex mirrors covers about 30% of their market share there. We believe we can penetrate this two new countries this year,” he added.