News
Battery manufacturers feeling heat from China

GS Battery, an international company that manufactures lead acid
batteries and provides back-up power for such applications as security
systems and fire alarms, is one company that has been pinched hard by
the influx of Chinese manufacturers that have entered the space over
the last few years.

While the market originally consisted of seven main players more than a
decade ago, that number has expanded to well over 1,000 since China
opened its doors to international trade. Many of those original players
have been unable to match the significantly lower prices of these
Chinese manufacturers and have since left the segment – a fate GS
Battery might soon have to succumb to.

“Our business has been very affected by this,” says Jim Taylor,
director of business development at GS Battery. “It’s also made things
more difficult for consumers. It’s almost impossible to find a good
quality battery out there now.”

Quality versus price
To keep costs down, Chinese manufacturers have cut back on the amount
of lead that they use in their lead-acid batteries — a material that
makes up 90 per cent of the cost of a battery, but also affects the length of
time one can last. While many of GS Battery’s products last between
three to five years, a less expensive battery manufactured in China
will often not last longer than one year, Taylor says.

“My battery weighs six pounds, and our competitors’ weigh four,” he
says. “So while I have to charge $19 to provide customers a product
that works, many are going to our competitors to pay $14 for something
that won’t work for long.”

The low amount of lead also makes it difficult for manufacturers to
recycle these batteries, significantly increasing their toll on the
environment. With countries around the world paying closer attention to
their environmental footprints, it’s uncertain whether this practice
will be tolerated for long.

The EU might be the first to seriously regulate the distribution and
disposal of batteries. It’s in the midst of passing legislation that
will mandate all industries to ensure 25 percent of used batteries are
collected by 2012 — rising to 45 percent in 2016. Sixty-five percent of
lead acid batteries will be recycled, and the cost of both the
collection and recycling will be put on the shoulders of the industries
that produce them.

Starting in 2009, batteries will also have to be clearly labeled to
show how long they will last, and all producers of batteries must be
registered. This tough legislation is likely designed to deter some of
the questionable manufacturers in the marketplace – many who have
recently taken to placing artificial UL numbers on their products.

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Underwriters Laboratories (UL) – the company that tests the safety of
all power-reliant products – has issued a number of warnings over the
past year regarding various products that have been known to have
artificial UL Recognition Marks. These products range from AC adaptors
to cordless drill chargers. While the company couldn’t confirm the same
issue is affecting lead-acid batteries, Taylor says he knows this to be
true.

“Chinese manufacturers have been slapping fake numbers on many of their
batteries in Canada. We know, because we’ve been typing in their UL
numbers and they don’t register,” he says. “The worst part is, buyers
don’t know. They can only know if they do a search.”

A fake UL number means that the product hasn’t been tested – and
therefore isn’t safe to be distributed in Canada. To combat the
problem, UL recently began placing a holographic seal of approval on
some Chinese-made products, to make it much more difficult to
counterfeit it. The company has also established a toll-free hotline
and a database so customers can verify that a product’s UL seal is
genuine.


Customer comes first
While GS Battery is undoubtedly feeling the affects of Chinese
competition, many members of the security industry are refusing to
purchase these inferior products — including many of the company’s
larger customers, ADT, GE and Siemens.

Manny Lopez, an associate responsible for service and technical support
at Toronto-based installer SafeTech Alarm Systems, can understand why.

“We want to provide our customers with the highest quality products,
and that includes the batteries that accompany our systems,” he says.

The company has been using two different brands of batteries, Casil and
Solex, for years and has had great results. While battery-related
queries make up the majority of the customer phone calls that SafeTech
receives, many of them are due to an unnoticed loss of a/c power in the
customer’s home, rather than the quality of the battery.

Typically, the lifespan of SafeTech’s batteries usually sits within the
two-year range, at which point customers must go out and purchase
another one. At this point, it’s uncertain whether the customer opts
for the same brand or a less expensive one.

Regardless, GS Battery is continually looking for ways to take
advantage of the area where its competition lacks — quality. While
Taylor has heard many of his off-shore competitors are now
manufacturing batteries with a six-month lifespan, his company has
recently created a 10-year battery.

“We’re going in another direction,” he says. “I think those companies
that value customer service – that are willing to install systems for
free and stand behind a five-year warranty — will appreciate it.”

Vanessa Chris is a Toronto-based freelance writer.