SHENZHEN, CHINA (Oct. 10, 1:30 p.m. ET) — U.S.-owned Chinese mold making firm Feng Ping Tooling & Plastic Mfg. Co. Ltd. is expanding its Guangdong province factory as business grows, but in a bow to what it says is the uncertain economic environment worldwide, the company has at the same time put on hold alternate plans for a larger expansion.
Feng Ping, which employs about 300, is renting an additional building to add about 50 percent to its floor space, which coupled with efficiency gains in its manufacturing process, will potentially double production, said James Fiocchi, managing director and co-owner of the company.
The Dongguan city-based company has made other investments recently, such as installing a 600-ton two-shot Weltec injection molding machine as it expands into making two-shot molds, and getting into the business of building end-of-arm tooling.
The firm has recently made a push into the automotive market, including making molds for auto parts to be used in vehicles from major U.S., European and South Korean car makers, said John Fiocchi, president of the firm and co-owner with his brother James.
But it's also noticed a recent slowdown.
In a Sept. 26 interview at an industry conference in Shenzhen, James Fiocchi said softness in Feng Ping's main markets in North America and Europe was part of the reason the company put on hold serious plans it had underway to build a much larger new factory several miles from its current location.
“Our issue was with the USA economy not rebounding, or having a delayed rebounding,” he said. “We made a prudent decision based on the state of Europe and the USA, and what we've been seeing literally in the last six to eight weeks.”
He said business has slowed 10-15 percent in the last few months, as their customers, mostly injection molding companies and mold makers in Western markets, receive fewer orders.
The company also said it was delaying the larger expansion because factory prices in China are too high.
“We believe that the land and factories are overpriced and China will take a hit soon,” said John Fiocchi, who noted that factories and land in China are “more expensive that in the USA currently.”
Feng Ping's example illustrates some of the complexities of China's mold making business now.
Even with the recent slowdown, rising costs in China and weekly power outages in Dongguan this summer, the company said it still sees opportunities. Feng Ping is not as sensitive to the salary increases which have been hurting labor intensive businesses in China because it targets higher-value added markets, James Fiocchi said.
“Our product is injection molds. You don't make a penny a mold,” he said. “You make $5,000 or $10,000 or $20,000. We're not under the same type of pressure as a facility making 20 million bottle caps or shoes or handbags.”
“We do have an advantage in that our USA and European customers do want a higher level of communication and higher level of customer service and support,” Fiocchi said.