EngagingChina has long believed that great opportunities lie in China for western providers of testing and quality assurance services. So its good to see this thesis confirmed by Intertek, a UK-listed provider of quality and safety services.
In its latest trading statement, Intertek says that increased exports of toys, textiles and hardlines from China and Asia to the west are driving growth in Labtest, its consumer goods testing division. Hardlines is a retailing term for merchandise such as hardware, houseware and sporting goods.
Labtest specialises in testing and inspection services for textiles, footwear, toys, hardlines and other consumer products. Products undergo test and inspection programmes against a wide range of safety, regulatory, quality and performance standards. One growing trend is for large retail customers to require goods to be certified to their own operating standards.
As products are increasingly sourced from developing countries, Labtest has put in place a global network to allow test services to be provided near manufacturing sites or customers' buying offices, rather than in their destination markets. In addition, Labtest's rapid response times gives customers the ability to move quickly enough to meet changing regulations and industry standards.
Another big growth area — and one particularly relevant to China — is monitoring supply chains of western retailers and manufacturers to ensure they practice what they preach on the corporate social responsibility front and they they conform to fast-changing customs or security legislation.
Intertek recently signed a deal with Toys R Us to be a partner in its C-TPAT security inspection programme. The Customs-Trade Partnership Against Terrorism is a US government initiative that seeks to strengthen US border security by involving all partners in the supply chain.
All Toys R Us suppliers must participate in its C-TPAT programme but to save toy manufacturers in China and HK getting repeat visits from auditors sent by different toy importers, this deal lets Intertek take over the task and performs just one audit for each vendor or factory.