Cutlery

Sector Brief
The objective of this short write-up is to provide the reader with an overview of the
sector. The information covers global trade of the product, status of Pakistan’s
exports and summary of industry structure. Trade information for global comparisons
has been obtained from PC-TAS, International Trade Centre’s Database. Latest
available export data on Pakistan has been obtained from the Federal Bureau of
Statistics, Pakistan.

Revised on July 12, 2002

Small and Medium Enterprise Development Authority

Government of Pakistan
www.smeda.org.pk

HEAD OFFICE
st
Waheed Trade Complex, 1 Floor , 36-Commercial Zone, Phase III, Sector XX, Khayaban-e-Iqbal, DHA Lahore
Tel: (042) 111-111-456, Fax: (042) 5896619, 5899756
helpdesk@smeda.org.pk
REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE
PUNJAB SINDH NWFP BALOCHISTAN
Waheed Trade Complex, 5 TH Floor, Bahria Ground Floor Bungalow No. 15-A
1 st Floor, 36-Commercial Complex II, M.T. Khan State Life Building Chaman Housing
Zone, Road, Karachi. The Mall, Peshawar. Scheme
Phase III, Sector XX, Tel: (021) 111-111-456 Tel: (091) 9213046-47 Airport Road, Quetta.
Khayaban-e-Iqbal, DHA Fax: (021) 5610572 Fax: (091) 286908 Tel: (081) 831623,
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helpdesk-
Tel: (042) 111-111-456 khi@smeda.org.pk pew@smeda.org.pk Fax: (081) 831922
Fax: (042) 5896619, helpdesk-
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helpdesk@smeda.org.pk
1. Introduction

Cutlery refers to cutting implements, which can be used for industrial, commercial and
domestic purposes. In 1999 the international cutlery trade value was above US$ 4.5 billion
which can be divided into five major categories i.e. Cutlery-Razors & Razor Blades; Cutlery-
Scissors, Tailors' Shears and Similar Shears; Other Articles of Cutlery; and Knives, Spoons,
Forks etc., among which the first category had the lion’s share in total cutlery exports. Major
exporters of cutlery include China, UK, Germany and USA exporting nearly 45% of the total
international market of cutlery products. Major importers include USA, UK, Germany and
France accounting for 45% of total cutlery imports.

2. Global Trade of Cutlery

Cutlery exports have registered a positive growth rate in last three years with an average of
7% while previously, cutlery exports dropped by 1% in 1996.1
Table 1:
Value in $ million
World Exports
1995 1996 1997 1998 1999
WORLD 3544 3517 3801 3934 4253
Growth % age -1% 8% 3% 8%

Within different categories of cutlery, Cutlery-Razors & Razor Blades was the largest
category in terms of international exports. In 1999, total exports of this category were $1.8
billion, which constituted 44% of the total exports of cutlery. This share has increased from
33% due to an average growth rate of 13% in razor exports. Major exporters in this category
include UK, USA and Germany while major importers are UK, France and USA.
Table 2:
Value in $ million
World Exports Category-wise
Commodity Code 1995 1996 1997 1998 1999 Share in 99
(Aggregate) 3544 3517 3801 3934 4253 100%
Cutlery-Razors & Razor Blades 6963 1180 1164 1365 1472 1883 44.26%
Cutlery-Scissors, Tailors' Shears 69640 258 256 270 259 237 5.58%
Other Articles of Cutlery 6965 278 285 318 337 315 7.41%
Knives, Spoons, Forks etc. 6966 940 980 1053 1047 1013 23.81%
Knives other than 695.6 69680 888 832 796 820 806 18.94%

The second major category among cutlery is knives, spoons and forks whose share as a sub
commodity has decreased from 26.52% in 1995 to 23.8% in 1999, however it has
experienced an average growth of 1.97% in its international exports. USA, Hong Kong and

1
World trade of cutlery is reported under different SITC codes. For the purpose of analysis, all these codes
have been summed up to get the overall picture of the world’s trade of cutlery .
Germany are major importers while China, Korea and Germany are major exporters of this
category.

Exports of other articles of cutlery increased by 3% per annum while categories of scissors
& shears, and knives other than 695.6 had experienced negative growth of 2% and 2.34%
respectively.

2.1. Major Trade Players

China is the main exporter of cutlery as a whole and exported 16.59% of the cutlery trade in
1999. UK, which had 14.96% of the export share and Germany, capturing 13.98% of cutlery
market in 1999 were other major exporters.
Table 3:
Value in $ million
Major Exporters
1995 1996 1997 1998 1999 % Share in 99
CHINA 413 433 595 646 705 16.59%
UK 252 254 255 398 636 14.96%
GERMANY 701 578 630 599 595 13.98%
USA 342 384 368 378 464 10.90%
KOREA REP. 278 281 284 265 266 6.26%
FRANCE 169 166 179 201 222 5.23%
JAPAN 251 212 208 178 168 3.95%
OTHER 1138 1210 1282 1269 1196 28.12%

U.S.A. has been the largest importer of cutlery products for the last five years and accounted
for 21.4 % of total imports with a value of US$ 1.045 billion in 1999. UK was second with
approximately 9.4 % of world imports of cutlery.
Table 4:
Value in $ million
Major Importers
1995 1996 1997 1998 1999 % Share in 99
USA 738 764 837 880 1045 21.40%
UNITED KINGDOM 263 292 300 460 459 9.40%
GERMANY 473 466 412 413 388 7.95%
FRANCE 302 303 284 315 325 6.66%
HONG KONG 344 357 322 275 273 5.58%
ITALY 190 225 216 240 231 4.74%

3. Pakistan:

In 1999 cutlery accounted for $20.6 million in foreign exchange earnings, which was
approximately 0.49% of total cutlery exports. The share has decreased from 0.58%, which
shows that international exports had increased at a much higher rate than the Pakistan
exports. The average growth for the last five years was 1% but if growth rate is analyzed
separately for every year, it shows that only in 1999 Pakistan cutlery exports increased by
13% while in previous three years exports earnings have declined by average of 4%.
Table 5:
Value in $ million
Pakistan Exports
Years 1995 1996 1997 1998 1999
Value 20.44 19.88 19.44 18.27 20.66
Growth % (Value) -3% -2% -6% 13%

For international comparisons the data used is for the year 1999. However, data is also
available for Pakistan for the year 2000-2001, which shows that there has been an increase in
exports from $20.66 million to nearly $26.65 million – by more than 29% in last two years.

Some of the leading importers from Pakistan include U.S.A., which imported 56% of
Pakistan’s cutlery, France, which imported nearly 12.06% and UAE, which shared 7.28% of
the Pakistan exports of cutlery in 1999.
Table 6:
Value in $ thousand
Pakistan Major Partner
Country 1998 % Share 1999 % Share
USA 10563 57.82% 11566 55.98%
FRANCE 2823 15.45% 2492 12.06%
UAE 837 4.58% 1504 7.28%
SAUDI ARABIA 930 5.09% 1344 6.51%
GERMANY 837 4.58% 733 3.55%
SPAIN 452 2.47% 246 1.19%

Looking at the break-up of Pakistan’s cutlery exports, it has been found that the lion’s share
of total value exported is accounted by just one category which is ‘knives other than 695.6’
i.e. 70% of the total cutlery exports. This ratio has come down from above 80% and there is
increase in export of other articles of cutlery (6965) i.e. from 4.3% to 16.5% which is in line
with the world trend since this category is the largest category in the global exports with 44%
share. Pakistan exports categorized by 7-digit PSTC codes is explained at the end of the
report.

4. Pakistan Industry:

The cutlery sector is an important one. The industry structure reflects that it is purely SME
in nature, and is lacking in modern technology. The major portion of this industry is situated
in the locality of Wazirabad, Nazimabad and Allahbad in Gujranwala district. There are
approximately 300 units present in this region - about half of them are registered SMEs with
Pakistan Cutlery & Stainless Steel Utensils Manufacturers & Exporters Association. 25,000
people are associated directly or indirectly to this sector producing 5000 pieces per day
manually.
Table 7:
Value in $ thousand

Pakistan Product Mix 1999-00 2000-01

PSTC
Commodity C-Value C-Value
Code
Cutlery-Razors & Razor Blades 6963
RAZORS NON-ELECTRIC 6963100 660.22 1,533.74
SAFETY RAZOR BLADES 6963500 30.6 332.05
Cutlery-Scissors, Talilors' Shears and Similar Shears 69640
SICSSOR,TAILOR SHEAR AND BLADE 6964000 902.55 1,268.07
Other Articles of Cutlery 6965
PENCIL SHARPENER & BLADE 6965104 3.6 10.24
MANICURE/PEDCURE SETS 6965500 68.34 3,077.22
NAIL CLIPPERS 6965902 824.38 1,075.43
CLEAVERS 6965903 0 28.55
ARTICLES OF CUTLERY N.S. 6965909 89.19 205.81
Knives, Spoons, Forks etc. 6966
OTH SETS OF ASORTED ARTICLES 6966200 3.09 0
SPOONS 6966901 126.17 70.5
FORKS (CUTLERY) 6966902 1.74 11.24
OTH ARTICLES-KITCHEN/TABLEWARE 6966919 400.54 367.6
Bed Linen nes 6584319 1.26 0.31
Knives other than 695.6 69680
KINVES WITH BLADE 6968001 95.15 0.64
KNIFE BLADES 6968002 478.66 475.16
PRUNING KNIVES 6968003 0 4.78
TABLE KNIVES 6968004 33.25 0.48
BUTCHER KNIVES 6968005 3.83 10.9
POCKET KNIVES 6968006 749.26 1,287.78
KNIVES N.S. 6968009 18,454.63 16,890.24
Total 22,926.45 26,650.74
Exchange Rate RS/US$ 51.73 1999-2000
Exchange Rate RS/US$ 58 2000-01