With policy support, R&D, Cengong county's lighters burn brighter across global market

Though it is a small county in Southwest China's Guizhou province, Cengong is a major origin for lighters used across the globe, with billions of such products being manufactured annually and shipped to more than 100 countries and regions, including the United States, Russia and those in Southeast Asia and the Middle East, meeting 5 percent of current global demand.

The county has come up with an industry of scale for the products in recent years, taking advantage of local preferential policies and continuous investment in research and development.

With 18 lighter production and supporting enterprises of more than 2,500 employees, Cengong alone has posted a production value of more than 300 million yuan ($47.1 million) last year, with that of foreign exchange through exports exceeding $20 million, compared with $570,000 in 2016, according to the local government.

The lighter business has substantially driven local economic growth while facilitating transformation and upgrading its foreign trade, it said.

According to the local economic development zone, the Cengong lighter industrial park now can produce more than 4 million lighters per day, and annual production reached more than 1 billion last year.

The county vows to further develop its economic development zone and build its park into China's largest lighter manufacturing and R&D base by the end of 2025.

Guizhou Hanhao Electric Co Ltd, for example, a foreign trade enterprise in Cengong that accounts for one-third of the lighters produced in the county, currently produces more than 1 million lighters daily that are sold to 65 countries and regions worldwide.

The company has been investing in the R&D of lighters in recent years, gaining 16 patents for design and utility models, said Liao Jun, deputy managing director of the company.

To have better and faster access to industry information globally, the company located its R&D team in the coastal regions, a move that has proved to be effective by its successes overseas, Liao said.

Hanhao has also benefitted from the reduction and exemption of taxes among many preferential policies, which has further facilitated the company's global expansion, he added.

The Postal Savings Bank of China, for example, has been stepping up loan approval process efficiency for local lighter manufacturers. The lender has shortened the online loan approval process down to one day to solve financing difficulties for smaller enterprises.

It has also come up with different loan products targeting various companies of different credit levels to further support the development of the real economy through financial methods.

By the end of last year, the Cengong branch of the PSBC had issued almost 200 million yuan in loans to local small and medium-sized enterprises, with that for lighters and supporting industries up to 50 million yuan, it said.

Liu Hanhao, Hanhao's president, said the company is expected to achieve an annual value of production of 300 million yuan this year after it has achieved a certain industry scale for lighters.

Guizhou Jieda Electric Co Ltd has also been stepping up the transformation and upgrade. As the first batch of companies that were located in the Cengong economic development zone, Jieda has been improving product quality to stake its claim in the global lighter market.

As with Hanhao, Jieda has also been investing in R&D in recent years, gaining 12 patents for utility models and two for design.

"The company can produce 120 million high-end lighters each year, earning more than $7 million annually," said Wang Wei, factory manager of Jieda.

The company is currently working around the clock on an order of 100 million units from the US, Wang said.

Developing the lighter industry in Cengong county is matching the nation's industrial upgrade, said Song Xiangyun, president of the Lighter Industry Association of Cengong.

"Compared with the eastern regions in the country, labor costs here are much lower, enabling enterprises to spend more on lighter R&D," Song said.

"Also, lighter-making features mechanized intensive production and consumes much electricity, but the cost of electricity in Guizhou is relatively low－another benefit for local makers."

Guizhou is rich in coal, wind and hydropower resources, but has relatively fewer power-consuming enterprises compared with those in the eastern parts of the country, which has led to relatively lower electricity costs.

In addition, the Guizhou government has also recently come up with a series of policies to lower industrial electricity prices for the companies to attract more industrial enterprises.

Song said the development prospect of the lighter industry in Cengong county is promising.

"Now the development of the lighter industry here has received the attention of the Guizhou government and has gained policy support including tax reductions, rent exemptions and electricity cost reductions, which will further facilitate the development of the lighter industry in Cengong county," he said.

Song also suggested moving more supportive industries related to lighter manufacturing to Cengong county from the eastern parts of the country to enjoy labor and power benefits.

Cengong aims to build an upstream and downstream chain of the lighter industry to promote the intensive development of the Cengong lighter industry further.

The county has also come up with a platform of lighter industry investment and financing, an intelligent transformation platform, an inspection platform and laboratories to further facilitate the lighter industry in the county to further tap the global market.

With cluster development featuring the complete lighter industry chain being the main target, the county vows to further step up product R&D to come up with more value-added and high-end products to make Cengong's lighter industry a more competitive one globally.

Zhang Chi contributed to this story.