Norwegian-Chinese entrepreneur Cao Kan thinks the future of the European spa market rests in China, and he wants his new plastics factory in Foshan to play a role.
Cao, a Chinese native who emigrated to Norway 25 years ago, opened the 64,600-square-foot plant last year with the idea of exporting acrylic spas, shower stalls and bathroom products like toilets to northern Europe.
While his operation is small, employing just 30, Cao, chairman of Bergen, Norway-based Nordic Harmony Ltd. (China), said he believes in a few years most of Europe's spas and tubs will come from China, as the country's quality improves.
There are some hurdles, though - particularly China's currently poor state of quality, he said.
Cao said his inability to find good manufacturing sources in the country led him to start his own operation in Foshan. He spoke in an April 18 interview at Nordic Harmony's booth at the export-oriented China Import and Export Fair, better known as the Canton Fair, in Guangzhou.
At first he tried importing spas and bath products from China, but abandoned that approach when the Chinese firms he was dealing with resisted upgrading their technology to make a splash in the more demanding European markets.
``When the owners [of the Chinese firms] don't have the right attitude, it is difficult,'' said Cao, who earned a master's degree in physics in Norway.
But Cao, who saw opportunities in the spa products market while selling real estate in Norway, said China is learning fast.
Considering where the Chinese market for luxury goods like his was five years ago, he predicts its quality will catch up quickly and pose a significant price challenge to the spa equipment industry.
``In five years, Chinese spa products will reach European, American or Canadian quality standards, but the price will be half,'' Cao said. ``Most of the products will come from China.''
Part of that, he said, rests on wage levels in what remains a fairly labor-intensive process of forming acrylic into tubs and basins.
The typical wage for a reasonably skilled factory worker around Foshan is about 1,400 yuan a month ($180), although Cao said his employees make several hundred yuan a month more than that.
Plus, he said, Chinese demand for moderate-quality bathroom tubs and fixtures is growing, particularly for those that fit well in the country's smaller homes: ``We are very interested in the Chinese market because it is a big market and the quality requirements are not so high.''
While all of his Chinese production is designed in Europe and exported to Norway, targeted at what he said is a midrange market, Cao is banking on expansions of the Chinese market and more exports.
He said he has bought 50 acres of land in Foshan, and has general plans to expand his factory space and employ 400-500 people there in a few years.
``If we don't reach that amount, we haven't succeeded in China,'' he said.