November 23, 2004

Solinc in the Wall Street Journal

My thanks to Neil King Jr. for this top-notch article about what's going on with China and India's impact on world businesses.

Check this out:
The competitive pressures are by no means limited to North America. South Korea's Solinc Co., a maker of plastic-injection molds and parts, started getting underbid by companies in China last year. The company did some detective work, even bidding out various jobs to China to get a more precise feel for prices there. "We then broke down every aspect of our own pricing to find what parts of the chain were costing too much," says Steven Koons, a marketing manager at Solinc.

The company has now embarked on what Mr. Koons calls "creative outsourcing." Solinc has opened a training center in Vietnam and flown in high-end design computers. Thirty specialists at the center in Hanoi will soon handle much of the company's three-dimensional design work, at prices much lower than in South Korea.

Solinc's main factory outside Seoul is still making all the molds, but some of the simpler and more labor-intensive manufacturing work has gone to a company in the Philippines. The company has also put more effort into marketing and service. It has opened sales offices in the U.S. and Germany to get closer to customers. For similar reasons, it is now scouting for a site in Eastern Europe to build a factory to make and rebuild specialty molds for European customers.

"I think it's fair to say that China has made us stronger," says Mr. Koons. Still, he doesn't buy the idea that China will remain seriously competitive on price for years. "As they are getting more capable, they are also getting more expensive," he says.

UC Davis News & Information :: In the News

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