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| | Educo / HapeEduco is known world wide for creating superior quality bead and wire mazes that are durable, have educational value, adhere to strict safety standards, and innovative designs. Educo studies their market and creates toys that help children develop hand eye coordination, recognize color, shape, & size, teach counting, help with visual tracking, language development, spatial concepts, promote imaginative play, and improve listening skills through teacher directed activities. For HaPe Intl., China is Perfect for Producing Quality Toys Sherwood Park, AB – Even in hindsight Peter Handstein would have made the same decision he made over ten years ago: to migrate his German expertise in manufacturing high quality toys to China where he would build a production facility of his own. That business decision has been one of the most significant ones for HaPe in their quest to get good quality toys in the hands of children around the world. With the recent safety recalls, one may question the integrity of a Chinese manufacturer or assume a product made in China is of a lower quality. However, according to Handstein, you could not be further from the truth. "The safety and quality of a product are the responsibility of the company, not the country," insists Handstein. Behind the award-winning collection of HaPe-branded toys is a combination of German-based production process steeped in quality practices and an eager and innovative Chinese workforce. Handstein built the 60,000 square foot facility in Ningbo in 1995, employing 90 workers and growing to 200,000 square feet in 2005. A modern coastal city, Ningbo allowed for easy export and access to a reliable workforce. "Ningbo has a reputation as a beautiful, open-minded city for business, and offers a good quality of life," states Maggie Qiu, General Manager of HaPe, Intl., for North America. The safety of children is extremely important to HaPe as a manufacturer whose range of toys is inspired by children. That is precisely why they place such high standards on the careful selection and processing of materials in the development of their toys. According to Ms. Qiu, "In our wholly-owned factory in China we continually fine-tune our processes to ensure product safety." How HaPe Ensures Safe Toys All HaPe products conform to heavy metal (toxicology) testing as required by the ASTM (American Society for Testing and Materials) for the US and Canada. They also meet all industry standards including EN 71 (European Standard). The manufacturing facility in China operates according to strict quality processes and is licensed to export products from China to the U.S. Handstein introduced quality principles upon the opening of the Chinese manufacturing headquarters after years of running the German plant. In 2000, HaPe became one of the first toy manufacturers in China to become ISO 9001 certified, later adding ISO 14001. Today Handstein runs the day-to-day operation and has a German technical team oversee production and perform safety audits. In addition, Ms. Qiu makes quarterly trips to China to review new products and assure quality. Product testing is performed on each HaPe Bamboo product before it is shipped to retailers. All other HaPe products are tested at initial development and two years later (in compliance with ASTM and EN71 standards). SGS, a leading independent inspection, verification, testing and certification company headquartered in Geneva Switzerland, has been contracted with to ensure products comply with regulations, standards and contractual specifications. Should a safety issue occur, HaPe works with the CPSC to investigate and take corrective action. This may escalate to a recall, even though a consumer has not reported one. Over the years HaPe has had one incidence requiring CPSC involvement. In May of 2007 they worked with the CPSC when 5,000 Bamboo Anima games sold only at Target were recalled after safety testing revealed the subcontractor used paint containing lead when they depleted their supply. The required imported ink from Germany was not used and Hape no longer contracts with that subcontractor. Today manufacturing is more tightly controlled and testing, prior to export from China and at random, occurs regularly. To avoid a repeat of this occurrence employees have been trained in quick and effective interventions and supply chain management. They source top-of-the-line materials from responsible suppliers around the world. The required raw materials list includes birch plywood from Russia, lacquer from Belgium and beech wood and water stain from Germany. As a company HaPe values a work environment that fairly treats employees. They also make the environment, intellectual property and economic development key priorities. Fair Treatment The HaPe work environment and benefits package for their 900 employees is superior in comparison to other Chinese manufacturers. Production workers are scheduled to work less than 48 hours a week and are paid at higher rates after 40 hours. Job candidates must be at least 18 years of age in order to apply for any position. In July, 2007 HaPe announced that the minimum salary for Ningbo production workers was 1210 Yuan per month, 38% higher than the average minimum in Ningbo. This is part of HaPe’s concerted effort to attract and retain workers. Moreover, “the salary is expected to increase at a rate of 10%,” states Ms. Qiu. As a result, the company’s jobless rate is below 1%. Employees also benefit from medical insurance and worker’s compensation. Environmental Protection HaPe practices good environmental stewardship by replacing trees in specific areas where they have harvested raw materials. Thinking “green” in 2003, they were the first manufacturer in the world to use highly sustainable bamboo in toys with a range of games called Bamboo. That was when UNESCO (United Nation Educational, Scientific and Cultural Organization) other international organizations and HaPe conducted a workshop with designers, teachers, therapists and architects from 15 countries. The workshop resulted in possible solutions to the challenges in using bamboo - bamboo can outgrow any other plant in the world - as a substitute for wood. This range of award winning games and creative play sets have been readily accepted by retailers as more and more consumers look for environmentally sound products. Intellectual Property HaPe respects the intellectual property rights of others and has implemented and maintains a Code of Business Practices System that supports purchasing products from safe and law-abiding suppliers. This was confirmed in an audit by the International Council of Toy Industries (ICTI) in 2006. Economic Development HaPe understands the importance of improving the lives of people in their community. Currently HaPe is involved with the DEG Bank of Germany to collaborate on Private- Public Partnership Project (PPP) to help improve the standard of living among impoverished Anji residents in China. This bamboo forest will become home to a workshop for professors and students to develop new product designs with bamboo and offer employment opportunities to adults who live there. It’s pretty clear – China is home for HaPe. Their pursuit is high quality, safe toys. They’re sure to achieve that in Ningbo. | . 
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