Every successful Chinese exporter has its own story of how it survives and thrives in fierce competition, especially in today’s tough environment — with realities like rising costs in China and growing competition from other emerging economies.
Cosmetics packaging manufacturer Shanghai Blopak Co. Ltd. shared its version during a plant visit and interview shortly after the Chinaplas trade show, held April 18-21 in Shanghai.
The three-story factory sits in a quiet industrial zone in Shanghai and houses more than 300 employees in 140,000 square feet of manufacturing space.
Blopak was established in 1992 in Shanghai and initially focused on making plastic bottles and tubes for the domestic market.
“We changed ownership in 2005 and switched focus to export,” said Michael Ken, international sales manager. The company built its existing plant in 2007 and moved the entire operation over.
Today, the plant runs 13 blow molding machines, 13 injection presses, five extrusion lines and seven scrap recycling systems. It supplies major customers such as Revlon, Avon, CVS, Henkel, St. Ives and GSK, and reports more than $15.8 million in annual sales.
“Production is very busy, and we expect to see a 10 percent growth this year,” Ken said. The company is adding one extrusion line and is considering plans to expand production space on the same site.
Over the years, Blopak has felt the pinch of rising wages and started automating its machinery. For instance, Ken said, the company now uses fully automatic capping machines.
“We only now need three workers for the same job that used to take 10 people,” he said.
Turnover rates are low, Ken said. Half of Blopak’s Shanghai workforce consists of local residents. “They are pretty stable and don’t carry the risk of not showing up after a long family visit for the Chinese New Year,” he said.
About 75 percent of Blopak’s business comes from export markets including the U.S., Europe, Australia and Asia. Ken said its export business is growing at a faster rate than domestic sales.
It has acquired half of the shares of a New Zealand customer and renamed it Zedpac as its new sales division. Zedpac has offices in Shanghai, New Zealand and Australia. Ken said the firm exhibits at U.S. trade shows and is thinking of setting up a U.S. office.
Interestingly, while trade shows do generate customer leads, the majority of Blopak’s customers connected with the company through Alibaba.com, China’s leading B2B platform. “Out of some 100 customers, more than 70 actually came from Alibaba,” Ken said.
One of them is Oakland, Calif.-based Purity Cosmetics Inc., which makes and markets herbal cosmetics under the “100% Pure” brand name. The company found Blopak on Alibaba.com and, after some initial contact, paid a visit to Blopak’s factory arranged on Alibaba. Now Blopak supplies all of the plastic tubes Purity uses, including some that are made of recycled materials.
Ken said his company also used Alibaba to arrange third-party product and facility certification by Bureau Veritas or Intertek, which buyers find very useful.
In addition to cosmetics packaging, Blopak also makes packaging for food and industrial applications.
“We work very hard to improve production and management efficiency and to develop new markets,” Ken said, “and that pays off.”