Fibox follows its customers to China
Fibox follows its customers to China
27/06/2005
Finland’s Fibox Group begins manufacturing plastic products in China. Finnfund is one of the financers of the Fibox's project. The factory, due to be complete in August, will concentrate first on contract manufacturing of precision plastic parts, where services are customized to meet the needs of each client.
Finland’s Fibox Group is to begin manufacturing plastic products near Guangzhou in southern China. The factory, due to be complete in August, will concentrate at least initially on contract manufacturing of precision plastic parts, where services are customized to meet the needs of each client.
Tapani Niemi, managing director of the Group, says that Fibox’s largest customers in China will be the western companies that it has traditionally worked with.
“They are increasing their production in China so Fibox has to follow suit. In this way we ensure that delivery times remain minimal,” Niemi explains.
Customers old and new
Fibox is also seeking new customers in China, Niemi adds. The company is offering its services to small and medium sized enterprises that can benefit from outsourcing plastic injection manufacturing and product design instead of operating their own production facilities.
“As a medium-sized manufacturer Fibox concentrates on the plastic enclosures and precision mouldings that are produced in volumes too small to interest large manufacturers,” he says.
Apart from serving smallish customers, Fibox also operates in cooperation with large global competitors, supplying them with small amounts of plastic parts needed in production. “As a medium sized company, we’re flexible and fast,” Niemi claims.
Competition will admittedly be tough in China. Precision moulding is still dominated by large international companies but Chinese manufacturers are also entering the market. Niemi comments: “You have to sprint to stay ahead in this race.”
Useful experience from Korea
The production plant is being built to meet Fibox’s needs in a business park near Guangzhou. It will lease the 5000-square metre premises from the Chinese construction company and take care of modifications that its production requires, such as ventilation.
Initially the plant will have 40-50 workers, all Chinese apart from a Finnish manager. In 2006 the number of staff will increase to about 200 workers.
The Far East is already familiar ground for Fibox, which has had production in South Korea since 1995. In Korea the company manufactures enclosures for electrical and electronic devices, sold on the local market under its own brand name. It is the market leader in its field.
“One of the things that Korea has taught us is to pay close attention to local conditions and preferences. You shouldn’t go there to teach but to learn and to apply the things you know.”
Niemi believes that his company’s experience in South Korea has made the China project easier to execute. Fibox began planning a unit in China back in 2003.
“In China it takes a long time to obtain the various permits but once agreement has been reached, matters start to move ahead quickly.”
For companies planning operations in China, Niemi recommends a detailed survey of the market. Costs must also be carefully calculated.
“Setting up shop in China should not be the aim in itself,” he points out. “It must be of real value to the company in building a chain of value.”
Skilled questioning from Finnfund
Finnfund is one of the financers of Fibox’s project in China, and Niemi says that they have worked well together. Apart from finance, Finnfund has contributed its considerable experience of the Chinese market.
At different stages in the project, Finnfund has served as a sparring partner for Fibox. “This joint work has taken time but Finnfund’s experience has been valuable and its people have asked us the right questions,” says Niemi.
The project has suited Finnfund’s line, too. “Really small companies get no benefit from operations in China, and on the other hand, Finnfund’s resources are not big enough for major corporations,” explains Finnfund’s managing director Jaakko Kangasniemi.
“Internationalisation is sensible and essential for medium-sized Finnish enterprises like Fibox. And this is the kind of project where we can offer value-added.”
Turnover of the Fibox group was some 40 million euros last year. The company has four production plants and subsidiaries in ten countries, as well as numerous local distributors on all continents. In Finland Fibox has premises in Kirkkonummi, Lempäälä, Kempele and Kiuruvesi.
For further information at Finnfund please contact Ms Ilmi Aho tel. +358 9 3484 3335, email firstname.lastname@finnfund.fi
