Chinese toy factories retool after recalls

China's toy factories are changing their production in the face of bad publicity over recalls.
China's toy factories are changing their production in the face of bad publicity over recalls. Tim Johnson / MCT

SHANGHAI, China — Coming soon to a toy store near you: plush teddy bears with altered noses.

Reeling from global recalls, China’s toy factories are scrambling to ensure the safety of their products, down to the venerable teddy bear. Mostly gone are the old-style black vinyl or plastic noses, which contained chemicals. Now, the noses on most stuffed playthings coming out of China’s factories in this pre-holiday season are stitched or embroidered.

“Before the recalls, some European companies asked for the embroidered noses, but we ignored them,” said Emily Cao, a sales representative for the toy division of the Jiangsu Guotai International Group, a major producer of stuffed playthings.

No one is ignoring safety issues anymore. Toy retailers and manufacturers are hurrying to contain the fallout from recalls that terrified parents, damaged toy companies and gave Chinese toymakers a black eye. Bad publicity has sobered toy manufacturers, which now strive to show that they've improved quality, even if it means costs will rise.

At the Shanghai Toy Fair, producers eagerly demonstrated design changes. They tugged on seams of stuffed toys to show double stitching and pried at plastic eyes to demonstrate how they wouldn't fly off. Materials such as artificial leather, which can contain noxious chemicals, no longer appear. Sales agents pulled out certificates to prove that paint they used was found free of toxic lead content.

The spate of recalls began in June when 1.5 million Chinese-made Thomas The Tank Engine wooden railway toys were pulled off shelves because of a lead poisoning hazard. In August, Mattel Inc., the world’s biggest toy retailer, recalled 21 million toys, some containing lead paint. Also recalled were millions of Polly Pockets and Batman action figures with tiny magnets in them that could be harmful if swallowed. Mattel later apologized to China for the trouble the recalls had caused.

Last week, China’s product safety chief, Li Changjiang, suggested that some countries were using the recalls as a protectionist way to slow down China’s export boom. But he added that the toy factories are churning at full tilt and hadn't suffered much from the recalls.

“They told me, ‘Our orders are all up. The workers have to work overtime or the orders cannot be met,'” Li said. “When I heard this, I was shocked.”

A top toy industry representative offered a less rosy outlook. Liang Mei, secretary general of the China Toy Association, a Beijing-based trade group, said that the recalls present “both a challenge and an opportunity for the Chinese toy industry,” which produces about 60 percent of the world’s toys.

Officials are watching closely to see if buyers shift to other low-cost factories in Asia. So far, China is confident that it may benefit from the crisis as toymakers strive to produce higher quality products, she said.

For their part, some buyers said global retailing giants pressure factories heavily to lower prices.

“You squeeze the factories too hard, and it leads to problems,” said Sean Charlesworth, a buyer for Whitehouse Leisure, a British toy importer.

“There’s been too much scare-mongering. A lot of major clients are panicking and assuming the worst,” said Garry Brandt, the managing director of Henbrandt Ltd., a British toy distributor.

The toy industry hurtles along faster than most sectors, reacting to changing consumer tastes with short product cycles. It takes 14 to 15 months between a toy’s conception and the time it can arrive on a store shelf. Buyers roaming China now are preparing not for this holiday season, but for Christmas 2008.

“There are about 35,000 toys on the shelves at any given time around the world,” said Ian J. Anderson, a veteran toy industry executive who oversees consumer testing of toys for SGS, a Swiss-based company. “About 70 percent of the product changes every year. . . . Innovation drives the toy industry.”

Even with the high volume of recalled items, experts don't foresee empty shelves.

“They’ll be plenty of toys on the shelves this year, but there may be spot shortages on particular items,” said Charles M. Riotto, president of the International Licensing Industry Merchandisers’ Association, a New York-based group.

Anderson said the recalls are forcing factories to conduct more testing on their products.

Testing companies check for flammability, safety of materials, ingestion risks for small parts and other perils, and they say business is booming.

“Applications for lead testing are at their highest in four years,” said Sarah Cui, the senior marketing executive for CMA Testing and Certification Laboratories, a Hong Kong-based company.

But as toymakers pay for additional testing, shun cheaper paints with lead in them and adopt other methods to enhance quality, costs will rise. Expect retail prices to inch up, but not right away, experts say.

“If there is a price increase, it will probably show up in the spring of next year,” Riotto said, adding that he doesn’t think U.S. consumers will find price increases objectionable. “For the knowledge and comfort that you are getting a safe product . . . you’re not going to argue over paying an extra dollar.”

Anderson said some Chinese toymakers are learning that even small safety steps can help sales.

“See that alphabet board over there?” Anderson said, pointing toward an exhibition booth that contained wooden toys for tots, including a wallboard with painted cut-out letters. “If you’d been here last year, it would have been two-thirds that size, and the letters would have failed the small-parts test.”

He was referring to standards that prohibit toys from containing small parts that tots might ingest.

Even Chinese toymakers selling in the domestic market are worried about their safety image. Already, foreign toymakers are moving into China, leveraging their reputation for quality and safety in a nation where most parents dote on a single child.

“No matter if you are in China or abroad, all parents worry about the safety of toys,” said Lisa Wang, a senior designer for Beijing Kayee Toy Co., which makes Scooby-Doo and Strawberry Shortcake stuffed toys for export.

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