ABC manufactures and markets signaling flares

Document Sample
ABC manufactures and markets signaling flares Powered By Docstoc
					ABC manufactures and markets signaling flares. These flares are marketed to both
recreational and professional users within the marine, highway, railroad, and wilderness
industries. Flares are classified under SIC 2899: miscellaneous chemical products. This
category includes explosives which is comprised of products such as flares, fireworks,
pyrotechnics, and other consumer explosive products. This industry represents a
relatively small part of the overall explosives market. However, the industry is growing
due to the increased use of fireworks in holiday celebrations, stage productions, and
amusement park displays. There is also strong demand being derived from the
automotive market as explosive igniters and propellants are used in air bag systems.


              Trade Balance: Fireworks, Signalling Flares, Fog Signals, Rain
     ($000's)           Rockets, and Other Pyrotechnic Articles
     $200,000

     $150,000

     $100,000

       $50,000

             $0

      -$50,000

     -$100,000

     -$150,000
                           3/1/99-2/28/00             3/1/00-2/28/01       3/1/01-2/28/02
                                            Imports   Exports    Balance
   Source: Library of Internatioal T rade

 Trade data is available for fireworks, signaling flares, rain rockets, fog signals, and other
pyrotechnic articles. According to the data, imports during the 12-month period ending
2/28/02 increased 10.7% from $130 million to $144 million. During the same period,
exports decreased 25.9% from $58 million to $43 million. As a result, the trade deficit in
fireworks, signaling flares,
                                     Origins of Imports              Export Destinations
rain rockets, fog signals,
and other pyrotechnic            China               94.13%         Australia       43.19%
articles increased 40.3%         Rest of World        5.87%         Mexico          27.99%
from $72 million during the 12-month period ending                  Japan           13.31%
02/28/01 to $101 million during the 12-month period ending Canada                     3.98%
02/28/02. China dominates the market. According to the              Israel            2.58%
Library of International Trade, China accounted for 94.13%
of imports.
Fireworks account for the largest percent of sales within the category of fireworks,
signaling flares, rain rockets, fog signals, and other pyrotechnic articles. When fireworks
are removed from the category, imports of signaling flares, rain rockets, fog signals, and
other pyrotechnic articles during the 12-month period ending 02/28/02 were $9.5 million.
However, imports increased 28.5% from $7.4 million during the 12-month period ending
                Imports: Signalling Flares, Fog Signals, Rain Rockets, and Other
                                       Pyrotechnic Articles
    ($000's)
     $10,000
      $9,000
      $8,000
      $7,000
      $6,000
      $5,000
      $4,000
      $3,000
      $2,000
      $1,000
          $0
                         3/1/99-2/28/00       3/1/00-2/28/01         3/1/01-2/28/02
    Source: Library of International T rade

02/28/01. Within this category, China still remains the largest source of imports with
70.34% market share. The top two export destinations for signaling flares, rain rockets,
fog signals, and other pyrotechnic articles are Canada and Mexico, accounting for 76.5%
of exports.
                                                 Origins of Imports          Export Destinations
The fireworks industry plays an important
role within the markets that ABC competes      China          70.34%        Mexico       67.85%
within. Firework sales are seasonal, with      Germany        14.20%        Canada        8.67%
                          th
sales increasing for the 4 of July and New     U.K.           11.47%        Israel        6.25%
Year’s celebrations. As a result, these        Italy           3.44%        Australia     5.13%
firework companies have excess capacity        Taiwan          0.54%        China         2.05%
the rest of the year. In order to fill this
capacity, these companies look for additional markets to develop, such as flares. The
technology used to make fireworks is similar to that used to make flares. Therefore,
ABC is facing increased competition from imports as their niche market continues to be
targeted.

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:0
posted:10/2/2012
language:English
pages:2