Growing Grey Market
April 25, 2007
Between 12 and 15% of bearing sales in the United Kingdom are made on the ‘grey market’ and puts end users and distributors at greater risk of costly breakdowns.
According to Schaeffler (UK), current estimates indicate that the UK’s ‘grey market’ for bearings accounts for between 12 and 15% of total UK bearing sales Not only does a growing grey market open up routes for more counterfeit products to enter the market, It also puts end users and distributors at greater risk of costly breakdowns, litigation and void warranties
This article was originally published on Manufacturingtalk on 2 Sep 2003 at 8.00am (UK)
Related stories
Improved track rollers offer better performance Yoke type and stud type track rollers contain needle rollers or cylindrical roller bearings with a profiled outer ring and can support high radial forces and axial guide forces. Low temperature bearings increase spindle speeds ‘Low temperature’ machine tool spindle bearings operate at significantly reduced temperatures – approximately 10 degrees lower than the average – resulting in speed increases of up to 10%. How do purchasers of bearings actually know that the products they are buying are genuine and will perform as well as they say on the data sheet? Most don’t have to worry because they purchase these products either direct from the bearings manufacturer or through an authorised distributor. This method guarantees that the manufacturer meets any product warranties associated with the bearing and that any technical problems with the product are resolved quickly and efficiently. So it’s worrying that in the UK, around 15% of all bearings are currently purchased via the ‘grey’ market, which refers to any purchase of a bearing that is not direct from the manufacturer or via an authorised distributor.
Further reading
New service advises on bearing maintenance To help its customers make maintenance programmes more effective bearing manufacturer INA FAG is offering a service giving independent diagnostic, monitoring and maintenance advice on bearings. X-life – a bearing quality double act from INA FAG Branded X-life, this new premium quality standard represents improvements in product design, product performance and service life that far exceed current standard values and expectations. Laser thermometer checks bearings Laser thermometer measures temperature of hard to reach or moving machinery components and will help machine operators act proactively against possible problems. The Internet, for example, has opened up more opportunities (and dangers!) for purchasers to buy bearings manufactured in the Far East and Africa but sold through unauthorised traders based in Europe, the Far East and Africa – indeed all across the world. Cross-border trading is commonplace and companies often sell off their surplus bearings to unauthorised traders. Although buying on the grey market doesn’t necessarily mean that the product is not genuine, it certainly increases the risk of customers ending up with counterfeit products. The grey market becomes an easier route for traders to supply counterfeit bearings into the UK. So why do companies purchase through the grey market? Cost is obviously the overriding factor here. * beware of low prices – as Des Pattinson, National Sales manager at precision bearings manufacturer Schaeffler UK, pointed out: “Although the offer price for the bearings may initially look attractive, buyers on the grey market have to ask themselves what are the potential hidden costs in terms of product liability and credibility with their customers if the product turns out to be counterfeit and things inevitably start to go wrong”. He said: “These could, for example, be critical bearings on high value machinery in a manufacturing plant. The buyer therefore needs to take into account the cost of any production downtime if the bearing fails early.” Purchasers also run the risk of not knowing how the bearings were stored, in what conditions and for how long. So, even if the bearing is a genuine product, the manufacturer of the bearing may not support product liability and the warranty becomes void. Pattinson offered a recent example: “A distributor bought some bearings from the grey market and asked us to analyse the products. Schaeffler discovered that the bearings were indeed genuine product but were more than six years old. This meant that the customer of these bearings would most likely have experienced lubrication problems that in turn could have caused costly machine breakdowns. There could also have been other performance-related problems due to incorrect storage and handling of the bearings during that six-year period. Under these risky circumstances, the distributor or end user of the bearing could be left totally isolated with no support from the manufacturer of the bearing.”. Buying from the grey market increases the likelihood of receiving counterfeit bearings, whether deliberately or accidentally. Earlier this year, Schaeffler destroyed more than 40 tonnes of counterfeit rolling bearings with a nominal value of around EUR 8 million at its FAG site in Schweinfurt, Germany. The bearings, which were INA, FAG and SKF-branded products, were seized at a Franconian rolling bearing dealer. “The financial damage resulting from such counterfeits is difficult to quantify, even for our companies alone,” commented Ingrid Bichelmeir-Bohm, lawyer and anti-piracy coordinator for Schaeffler Group. In addition to lost sales and significant loss of image through inferior-quality goods that may affect future business, there have been enormous costs arising from the investigation, seizure and professional disposal of the bearings. The disposal requires tight security, for only the full destruction of the counterfeits will eliminate the danger for the consumer. But the damage affects not only the companies producing brand-name goods and investing heavily in research, development and quality assurance. It also affects those companies that install these components. Rolling bearings are used in virtually every piece of rotating plant and safety-critical machinery and vehicles, from machine tools, wind turbines and X-ray apparatus, through to automotive, aircraft and rail vehicles. The Association of the German Tool Manufacturing Industry estimates that an annual 3,500 industrial accidents in Germany alone are due to counterfeit products. According to the German Engineering Federation (VDMA), the economic damage to the capital goods industry amounts to some EUR 4.5 billion per year. “If it weren’t for brand and product piracy, there would be about 70,000 more jobs in Germany,” said Doris Moller, Acting Board Member of the German Business Action Group against Product and Trademark Counterfeiting. In conclusion, buyers can only protect themselves and their customers from fake bearings by purchasing from a 100% reliable source – by sourcing direct from the manufacturer or via an authorised distributor.
Tags: Bearings, chinese car parking, parking newsRelated Posts:
Moscow fights illegal car parking
April 14, 2007
Like any major city, Moscow faces a lot of problems with traffic. With the number of cars constantly increasing, local authorities are introducing harsher ways to deal with the problem of illegal parking in the city.
So far, car removal units have been tackling the problem, by impounding illegally parked vehicles.
From the drivers’ point of view, these removal units have been virtually terrorising the city, towing away hundreds of vehicles every day. This measure leaves car owners stressed and frustrated, as it usually takes more than a day to get your car back. Some tow-workers even say there have already been several cases of attacks by angry drivers.
Two road traffic officers escort each car removal team. They decide whether a car is or is not to be towed away.
Now local authorities plan to introduce a special road traffic battalion, consisting of 290 officers to help fight illegal parking in Moscow. It will be deployed by the end of this month.
“It has become vital to set up a special unit in charge of towing cars away. Other units of the road traffic police in Moscow’s centre will not be involved. The unit’s key task will be towing cars to special parking lots,” said Sergey Lukyanov, head of the car removal service.
With their help, the city plans to increase the number of cars removed daily.
At the same time, authorities are planning to build multi-story car parks in several places in Moscow. This will serve to tackle the problem’s cause as well as its consequences.
Tags: china parking website, chinese car parking, China's parking industryRelated Posts:
China may raise manganese export tax
April 9, 2007
China may increase the export tax on electrolytic manganese and manganese alloy in a move to counter rising exports, an industry analyst told Interfax.
Industry rumours suggest that China may raise the electrolytic manganese export tax from 15% to 28 or 30% this month, while the export tax on manganese alloy may increase from 10% to 15%.
The price difference between electrolytic manganese and manganese alloy in domestic and overseas markets encourages exports under the current export tax rates, Antaike analyst surnamed Gao said.
The current manganese FOB price is $2,800 per tonne, while the domestic electrolytic manganese price lies between RMB 17,000 ($2,200) and RMB 18,000 ($2,329) per tonne. Under the current 15% export tax, the domestic price is approximately $113 to $270 per tonne less than the overseas price.
“China is likely to further increase the current the export tax rate on manganese and manganese alloy if there is a further increase in exports,” Gao said. He declined to comment further on the rumors.
China exported 33,900 tonnes of electrolytic manganese in January and February, down 19.15% from the previous year. High carbon ferromanganese (>2%) exports increased 106% to 24,967 tonnes and silicon manganese exports increased to 87,100 tonnes, up 55.9% during the same period, according to Beijing Antaike Information Co. Ltd.
Gao attributed the recent slump in electrolytic manganese exports to the Spring Festival and predicts that China’s electrolytic manganese and manganese alloy exports will bounce back in March.
China imposed the current 10% manganese alloy export tax on Jan. 1, 2007, down from a previous 20%.
On August 1 2005, the Chinese government cancelled the 13% export tax rebate on unrolled manganese and scrap manganese of tax code of 81110010 starting.
Manganese is essential to iron and steel production. Steel making, including its iron making component, has accounted for most manganese demand, presently in the range of 85% to 90% of the total demand.
Among a variety of other uses, manganese is a key component of low-cost stainless steel formulations and certain widely used aluminium alloys.
Source: Interfax
Tags: iron and steel, ManganeseRelated Posts:
China Buys African, Turkish Chrome on India Tax Rise
April 6, 2007
China, the world’s biggest producer of ferroalloys, is turning to South Africa and Turkey for chrome ore after India imposed a tax on the mineral to curb shipments.
Chinese steelmakers and traders are increasing purchases of chrome ore from those countries after costs from India increased, said Tu Kun, ferroalloy general manager of China Minmetals Corp., the nation’s biggest importer of the commodity.
India, which has less than 1 percent of the world’s chromium deposits, supplies one third of China’s imports of chrome ores. The South Asian nation imposed a 2,000 rupee ($44) a ton duty on overseas shipments of the commodity from March 1. Higher duties raised costs for Chinese buyers as the nation’s economic growth of 10.7 percent last year boosted consumption.
“Chrome ore demand is strong because of increased production capacity of stainless steel in China,” Tu said at a conference in Hong Kong.
China may boost stainless steel output by 37 percent to 7.35 million metric tons this year from 5.36 million tons in 2006, metal research firm Heinz H. Pariser said last week. Ferrochrome, a ferroalloy combining iron and chrome, can be used to produce stainless steel as a substitute for nickel.
“The Indian government doesn’t want to export any minerals,” said Goutam Dutta, mineral exports head of Tata Steel Ltd., at the conference. Exporters are trying to pass on higher taxes to buyers. “We will see how things settle.”
Import Surge
China’s chrome ore imports rose 40 percent to 4.32 million tons last year, including 1.34 million tons, or 31 percent, from India. About 18 percent were from Turkey and 17 percent from South Africa, according to customs data.
“Chromium prices will remain high in the second quarter” as Chinese demand keeps rising and exporters may impose more measures to curb shipments, Tu said. Prices could be more volatile in the third quarter as Chinese stainless steel producers may cut back production, he added.
Minmetals plans to boost chrome ore imports by 67 percent to 1 million tons this year, according to Tu.
No tag for this post. Related Posts:
