Pyrotecnico - Vitale Family Fireworks · 1889

Issues in China Weigh on the Fireworks Industry--Pyrotecnico Poised to Weather the Storm

A number of factors in China have accumulated over recent years to pose big challenges for our industry." says Pyrotecnico President Stephen Vitale. "Exchange rates, taxes, fireworks classifications and shipping costs affect all of us in the fireworks business." Vitale, who is also on the board of the American Pyrotechnics Association (APA), adds "The fireworks supply chain depends heavily on China and its economy. These changes were all foreseeable, but the timing and cumulative effect are creating a perfect storm."

Increased shipping costs.  The cost for shipping a container of fireworks over from China has nearly doubled over the last four years.

Increased materials and labor. With the Chinese economy surging, fireworks manufacturers now compete with other industries and pay a premium for labor and raw materials.

Exchange rates. The Chinese currency, the Yuan, is about 12% stronger against the US Dollar now than it was just 2 years ago.

Reduction in China's tax rebates.  In 2008, China has reduced the rebate amount for its fireworks manufacturers from 13% to 7%. This is effectively a 5% increase in taxes.

Fireworks classification changes. Aerial shells that are 10 inches or larger in diameter are now classified as 1.1G instead of 1.3G. It is no longer possible to import these shells from China. As a result, shells 10 inch and larger will not be used any more.

Warehouse fires. Chinese news reported a series of explosions in the shipping port of Sanshui caused by a fire that spread through 20 fireworks warehouses. It is estimated that Sanshui was holding around 200,000 cartons of fireworks at the time of the accident. Sanshui handles around 60% of fireworks exports from China and its warehouses are rented and used by many fireworks exporters. Chinese fireworks companies are working to remanufacture the fireworks, but many in the industry fear that it will not be possible to fully replace all of the losses. This incident comes shortly after road blockages during a recent snow storm near the port of Shanghai caused a backlog of containers awaiting export.

"Fortunately there were no fatalities and it is our hope that the village of Sanshui will be able to recover from this," comments Pyrotecnico President Stephen Vitale. Vitale, who is also o a member of the board for the American Pyrotechnics Association(APA) adds, "this is a serious situation facing our industry and many U.S. shows could be affected".  

When asked how his own company will handle these industry issues, Vitale noted that "we've always planned conservatively and have enough inventory to see us through our 2008 season. We're working hard and planning now to ensure that our 2009 shows will not be affected. We're talking with our suppliers in China and Europe to diversify our risk. We'll continue to deliver the creative, innnovative shows that our customers have come to expect from us." 

About Us

Pyrotecnico not only provides a beautiful and innovative show, but they have simplified my life. From permitting to music, they provide a turn-key show that completely blows away the audience year after year. Professionalism and creativity are hallmarks that can't be overlooked. It is a pleasure to work with them. Melanie Bacon
Executive Director
Downtown Shreveport Unlimited