Like other Taiwan injection machine suppliers, Taiwan Union Plastic Machinery Co. Ltd. continues to expand its production in China, with a new operation to make molds for two-color applications.
Union said it has taken the lead in tapping into inland regions for cheaper manufacturing even though wages are not yet a concern for the company.
The firm is building a factory in Chuzhou, China, just west of Jiangsu and Shanghai. The operation is a joint venture with a local partner, said technology Vice President Li Zhiquan. He said the plant will be producing by year-end. ``This factory will be dedicated to the design and production of dual-color injection molds,'' Li said.
In Chuzhou the average wage is less than half of what it is in Shanghai and about two thirds of the average wage in Jiangsu. The local governmental also touts low rent, tax breaks and discounted utilities.
Union, which operates the largest manufacturing space and workforce on the mainland among Taiwanese press makers, launched its first production in 1996 in Hangzhou, two hours south of Shanghai.
``At that time, an average worker got paid 700-800 yuan [US$88-$100] a month in Hangzhou,'' Li told Plastics News at the Applas show, Aug. 15-18 in Beijing. ``It has tripled ever since.''
Yet, Li said it is only fair. ``Workers today have better skills and higher efficiency.'' Output per worker is growing, he said. ``Plus, labor is not a significant cost for machinery makers.''
The past decade or two also has witnessed many investors changing their profit-maximizing strategies to people-oriented management, Li said.
``Living standards are higher, workers want more, and they deserve that,'' he said.
Union has added health-care insurance to its benefit package since 2000. The dormitories are equipped with TV sets and air conditioning. ``That's three-star standard.'' In addition, Li said the company invested 50,000 yuan (US$6,290) last year to provide commuting services for workers.
The production base in Hangzhou produces about 100 injection presses every month for the electronics and auto parts industries. The size of the presses range from 15-3,600 metric tons of clamping force.
Production cost remains manageable in China, Li said. ``We will keep all the production here to serve the market. We don't consider moving to lower-cost countries.'' It will cost more to manufacture in Vietnam, for instance, and ship machines back to China for sale. ``Market is the most important, and China is the largest market,'' he said.
Union will open a sales office in Vietnam by 2007.