Smedley industries inc liquidating trust,
Many countries in the Asia Pacific region have recently experienced severe currency devaluations, credit shortages, high interest rates and other economic difficulties.
China currently enjoys "most favored nation" "MFN" status under United States tariff laws, which provides the most favorable category of United States import duties. There can be no assurance that China will continue to grant or renew or recognize existing licenses, or will continue to abide by the previously established policies, rules and regulations currently hvs2 dating effect.
Changes in Chinese labor market conditions in recent years have made it more difficult for Hong Kong based manufacturers, and in particular consumer products manufacturers, to obtain the work force necessary to meet aggressive seasonal production schedules.
The Company has not entered into long-term contracts with any of these manufacturers. Unexpected changes in these factors can result in a lack of product availability or excess inventory in a particular product line.
The Company purchases certain plastic and non-plastic component parts and accessories from various sources, including several located in Asia.
Items sourced by the Company in the Far East generally are sold under letters of credit to U. On July 1,China assumed sovereignty over Hong Kong.
The Company manufactures its products chiefly from plastic resins. The Company owns most of the tooling used in manufacturing its toys.
There has been, and continues to be, opposition to the extension of MFN status for China. Accordingly, the Company closely monitors market activity and adjusts production schedules accordingly.
Accordingly, the Company expects to continue to be dependent upon these sources for timely production and quality workmanship.
The Company currently does not have in place plans or arrangements for securing alternate manufacturing sources in the event that its present relationships with manufacturers prove impracticable to maintain, and there can be no assurance that there would be sufficient alternative facilities to meet the increased demand for production that would likely result from a disruption of manufacturing operations in China.
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