As The Pattern Of Mold Production In China Changes, Cosmos Relocates Its Factories And Upgrades Its Technology- Taizhou Huangyan Xuejun Mould Factory

As The Pattern Of Mold Production In China Changes, Cosmos Relocates Its Factories And Upgrades Its Technology

Nov 10,2021

Cosmos Tooling Solution Ltd., a Sino-US joint venture mold manufacturer, faces the same problem as many factories in China's coastal manufacturing zone: how to retain talents in the context of rapid salary increases and faster turnover of personnel. So the company thought of a less common solution. The company moved its factory in Dongguan, Guangdong (Dongguan is a major mold production town with thousands of mold factories in the area) to Shaoguan, a small city 120 miles north, where there are not many mold factories. The company moved into a new 20,000-square-foot factory in May. Shaoguan (located in northern Guangdong) is a relatively unfamiliar place for foreign businessmen, far away from Dongguan and the surrounding multinational suppliers and security networks of Guangzhou and Shenzhen. But the company’s general manager, Hercules Shum, said the company believes that the 6 million yuan ($985,000) Shaoguan plant will help solve the company’s current important problem of brain drain. Shaoguan is a small city with a population of 3.5 million, mostly local residents, while Dongguan has a population of 8.2 million. According to statistics from the city, 6.3 million of them are from other parts of China and work in local factories and companies. Immigrants. Shum said: "The biggest reason for our relocation is that there is a loyal, stable and skilled labor force here. When we were in Dongguan before, there was a lot of staff turnover, and few people would stay here for a long time. Even if we are employees Providing various forms of incentives, it is still difficult to retain them for a long time." There is another more personal reason for choosing Shaoguan. Shum himself was born in Shaoguan. His grandfather worked in Shaoguan City Hall in the 1940s and later died in prison during the Cultural Revolution. Shum's father immigrated to Hong Kong more than 30 years ago and finally brought other family members including Shum to Hong Kong. But now the whole family has returned to their hometown, and Shum has also become a member of the Shaoguan City Advisory Committee. According to Chinese standards, Cosmos is a small mold maker with about 70 employees and annual sales of 2.5 million to 3 million US dollars. Shum said the company is very satisfied with the current situation. The company’s owners include Shum, three other Hong Kong investors, and two senior executives from two U.S. companies - Wakefield, Michigan-based mold maker Extreme Tool and Engineering Inc. and Swartz Creek-based company Mold design company Future Engineering Inc. They said that they value upgrading talents and equipment more than becoming a large company with about 1,000 employees. Shum said that China's rising production costs (but still far lower than the US) are changing the market. Shum added that due to the long-term impact of China's one-child policy, it will become more difficult to operate labor-intensive companies in China. Shum said in an interview at the end of November that the company is also facing greater competition from the return of US manufacturing to shore. Its business growth rate has slowed down in 2012, and the company believes that the return of US manufacturing to shore is one of the reasons. Shum said: "In the past, we mainly competed with Chinese mold makers, but now the competition from American mold makers is increasingly fierce. Overseas production is increasingly moving back to the United States." He said, therefore, Cosmos needs to continue its efforts to improve efficiency. When the company was founded in 2008, it had 120 employees and sales of $1.5 million. He said that since then, the company has laid off nearly half of its employees, while sales have nearly doubled. The company spends a lot of time on mold design before officially cutting the steel. The company bought higher-priced Japanese-made automatic equipment and adopted measures that are not common in China, such as 100% inspection of the electrodes in the mold. The company is trying to adopt methods commonly used in the factories of its partner Extreme Tool. Shum said that Mike Zacharias, President of Extreme, is the largest shareholder of Cosmos and has provided a lot of guidance and suggestions for the company's automation development. Shum said: "Mike taught us 15 years of experience in the development of mold production in the United States. He said,'I set foot in this industry 15 years ago. I know how difficult the future challenges are.' We want to be a company like this. A mold company as efficient as an American company." Cosmos specializes in export markets, but in an interview in 2010, Zacharias and other company managers had stated that they expected to sell molds to local Chinese companies. Shum said this did not happen as quickly as they expected, because the local market is reluctant to buy higher-priced export molds. Shum said that it may take five years to change, so the company is still focusing on the international market. At the same time, the company will continue to focus on lean production. He said: "We never wanted to be bigger. The mold manufacturing business we do is very different from other mold companies."

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