NEWTOWN, CONN. (Aug. 4, 4:40 p.m. ET) — The Society of Plastics Engineers is taking its Mold Maker of the Year award in a new direction, naming for the first time a recipient outside of North America — Chinese mold maker S.Y. Chu, chairman of Pacific Master Precision Injection Ltd. in Zhongshan, China.
Chu was recognized for what Newtown-based SPE said was both his business plan — growing the company from a startup in 2000 to a 1,200 person company today — and his interest in employee training.
Check out a video feature of Chu and Pacific Master here.
SPE also said it wanted to bring a more international focus to the award, which it first gave out in 1983.
Scott Peters, the chair-elect of the SPE Mold Making and Mold Design division, said he recognizes that choosing a Chinese mold maker might be controversial among some in the North American mold making industry, given the cost pressures from China and the economic hard times the U.S. industry has faced in recent years.
But he said Chu was the unanimous choice of the selection committee because his vision fit with that of the Mold Making and Mold Design Division, of growing through technology and employee development.
“He's not afraid to invest capital, whether human or financial, to make business relationships successful on both sides,” said Peters, who is the operations manager for home decoration firm Hunter Douglas's Guangzhou, China, factory. “[Chu's] ability to see that he needs skilled labor and is willing to foster that skilled labor really endeared him to the mold making and mold design division.”
In an interview at his factory, in Zhongshan, China, Chu said he is focusing on employee training because labor costs are rising dramatically in the Pearl River Delta, the manufacturing heavy region bordering Hong Kong.
Chu said he raised salaries across the board 25 percent last year, after the local government in Zhongshan raised the minimum wage 15 percent, and announced plans to keep raising minimum wages for the next four years.
China's central government is encouraging local governments to raise minimum wages to boost living standards.
Chu anticipates he will need to keep raising salaries to stay ahead of that.
“I think everybody doing business in China is facing the same problem,” said Chu. “We have to keep continually training our workers to work efficiently…Everybody knows it's hard to find workers in the Guangdong area.”
One strategy to address that, Chu said, is an agreement Pacific Master signed with a local school, the GangKou Technical College, to have its students come to his factory for training. He wants to broaden that arrangement.
Chu gave that school 30,000 Chinese yuan (US$4,690) when he won the SPE award. The school also received 3,200 Chinese yuan (US$500), an honorarium made possible by a donation from the DME Co. in Madison Heights, Mich.
Chu said the agreement is not entirely about altruism, though. It also gives Pacific Master first crack at the best students, he said.
Peters, a veteran of the U.S. mold making industry and SPE, said the SPE judges also liked that Pacific Master created separate workshops to build larger, more open tolerance molds, and smaller, more precision molds.
Chu also recognized that he would need to differentiate his company in a competitive environment, Peters said, and developed the capability to make molds to the Class 101 standard, the highest level set by the Society of the Plastics Industry Inc. in the United States.
Class 101 molds are guaranteed for more than 1 million cycles.
Chu said he invests in international equipment, such as Charmilles EDM machines, Mitsubishi and DMG CNC machines and gas assisted injection molding equipment. The 18,000-square-meter factory has 128 injection machines, along with assembly, painting and other decorating capabilities.
Most of the customer base is international firms, he said, either their China factories or directly exported, mostly in the home appliance and automotive markets.
According to company materials, customers and end users of its molds and products include Ford Motor Co. BMW, Honda, Electrolux, Nortel, Philips and Hunter Douglas.
That dependence on exports and international customers really hurt the company when the U.S. economy nearly crashed in 2008, though.
Chu said Pacific Master sales dropped from about 200 million Chinese yuan in 2008 (US$29.18 million), to 165 million yuan (US$24.13 million) in 2009, and only this year is projected to be back at 190 million yuan (US$29.6 million).
Still, he said he sees particular opportunities in the global automotive marketplace as the industry looks to cut costs, and will source more from China.
“Cost always is the first priority,” Chu said.
Even with costs rising, though, he said he thinks China will stay competitive in global manufacturing.
His 250 mold makers, for example, earn on average 3,500 RMB to 5,000 RMB a month (US$547 to US$780), so there is still some room to raise wages and remain cheaper than competitors in North America or Europe, he said.
Chu, who was operations manager for three China factories for toy maker Matchbox Group before starting Pacific Master, describes his business philosophy in simple terms, both for customers and employees.
“I treat my customer not as a customer, but as my partner,” he said. “That means we can set up a long-term relationship. I think this is one of the reasons Pacific Master can grow so fast.”
The second factor, he said, revolves around employees: “We give a clean concept to our workers… Set a target for them and try to help them achieve it.”
