Producing in the Greater Bay Area Why this is the perfect time to produce in China Your worldwide production partner With our production sites spread across three continents, we are in a great position to provide local for local production. This advantage leads to increased efficiency, more flexibility and low transport costs. As a result of our global quality standards, our customers can benefit from the same excellent service levels and quality no matter where they are. www.rompagroup.com T: +31 13 205 57 97 2 Why this is the perfect time to produce in China Connectivity Whitepaper 2018 If there is one place on Earth where the landscape has changed dramatically over the past three decades, it would be the Greater Bay Area in China. This area consists of the cities Zhaoqing, Foshan, Zhongshan, Zhuhai, Guangzhou, Huizhou, 1984 Dongguan, Shenzhen and Jiangmen, where Rompa Group is located. Macau and Hong Kong, the special administrative regions of the republic of China, are also part of this area. Zhaoqing Guangzhou Huizhou Foshan Dongguan Shenzhen Zhongshan Jiangmen Zhuhai acau on on Connectivity Whitepaper 3 Hong Kong - 1964 4 Why this is the perfect time to produce in China Connectivity Whitepaper Back in 1984 (see image p.3), this region the story of Machiel, a Dutch Rompa employee mainly consisted of farmland, untouched who left everything behind to dive head-first nature, fishing ponds, rice paddies, and into his new life in China. What challenges and forests. Today, it is dominated by factories, cultural differences did he face? What does he office buildings, and high-tech campuses. believe we can learn from the Chinese? The World Bank has called the region around the major cities of Shenzhen, Dongguan, One thing is for certain: the Chinese culture Zhongshan, Foshan, Guangzhou, and Jiangmen can be difficult to comprehend. If you are the largest metropolis in the world. The planning to do business in China, our practical number of inhabitants and the gross national tips can help you out. Finally, we want to show product grow faster here than anywhere else you what Rompa can do for you in China. We in the world. In 2016, the Chinese government opened our first site in China in 2000, have developed its thirteenth five-year plan, which been active years before and we have been is intended to highlight the region’s role and bridging the gap between East and West inspiration to become the global economic ever since. We were, are, and always will be supply chain. convinced that this is the perfect location for the development, production, and assembly of In the 1990s, Western production companies high-quality plastic products with or without mainly moved to the Greater Bay Area to electronic components. benefit from the cheap labour that was available there. These days, however, wage costs are no longer the only reason companies choose to have their products manufactured in China. The rapid economic growth makes this part of China even more interesting. In this whitepaper, we will explain why. It also tells Hong Kong - 2018 Connectivity Whitepaper 5 1 Nine reasons why this is the perfect time to produce in China As a rising superpower, China offers an infinite amount of opportunities to Western organisations, particularly in the region around the Greater Bay Area. Here are nine reasons why this is the perfect time to work together with a production company established in China: The Chinese excel at smart Throughout the rest of China, production 1 sites are being automated and robotised on engineering a large scale and the lean method is rapidly Anyone thinking of having their products growing in popularity. The Greater Bay Area produced in the Greater Bay Area should not is known for its high-tech manufacturing and do so just because labour is cheaper there. telecommunication. Moreover, there is a As the economy continues to grow and more mature innovation and start-up culture which and more people get an education. Why, will accelerate the future development of the then, would you want to produce in China? area. All this is necessary, too; the Chinese First, think of the large amount of technical workforce is ageing as a result of e.g. the expertise. China has set up its educational country’s one-child policy. system in such a way that the future workforce is in line with the need for expertise from the market. That’s why the Chinese excel at smart engineering. This, in combination with the advanced tooling and state-of-the-art electronics that is available in large numbers, Tokyo New York Greater bay San Francisco makes the Greater Bay Area the perfect place GDP (in billion USD) for production. 18 14 13,6 7,6 Moreover, it is certainly possible to operate GDP per capita (x 10.000 USD) more efficiently here. For example, because of a few new projects, Rompa’s production site 4,1 6,9 2 9,9 in Jiangmen managed to quickly upscale to Surface (x 10.000 km) more than 650 employees. When the projects were running, we investigated possibilities to 5,6 3,7 1,75 1,74 work with fewer people by automating certain Population (in mln) processes, and we adopted the lean method. Thanks to that, we were able to scale to just 43,5 23,4 66,7 0,7 300 employees. Source: Greater Bay Area Forum, Tencent 6 Why this is the perfect time to produce in China Connectivity Whitepaper According to the International Federation of Robotics (IFR), the number of new robots in China will increase by an average of 20-25% per year in the years to come. That is faster than anywhere else in the world. With this development, China – which traditionally has a labour-intensive industry – is rapidly gaining on other major robotising nations such as Germany, the United States, Japan, and South Korea. In 2020, China is expected to purchase 210,000 industrial robots. That means four out of every ten new robots produced will be sold to a Chinese buyer. Extensive supply chain makes it 2 easy to scale up quickly Excellent customer service is 3 “This is perhaps the biggest advantage of the standard our location in China,” says Jesse Plasman, In the Chinese business world, nothing is more director Far East at Rompa. “Whenever you important than having a good relationship need machinery, resources, components, jigs, with your customers. That is why the Chinese excel at customer service. Jesse Plasman has first-hand experience with that: “The people in our customer service department are amazing. They truly go to great lengths and make full use of their patience, customer-friendly attitude, expertise, and listening skills when dealing with customers. It is not just about finding quick short-term solutions; our Chinese employees strive to gradually develop long- term partnerships with customers. That level more people, or knowledge about the latest of devotion to customers also typifies Rompa, production techniques, you can find all that which explains why we fit in so well here.” and more practically around the corner. That makes it easy to scale up quickly and flexibly accommodate our customers’ wishes. We usually produce series of 50,000 to 1 million assembled products. In that range, you can be truly competitive here because of the high availability of people, knowledge, and resources. That is hardly possible in North America or western Europe these days.” “We usually produce series of 50.000 - 1 million assembled products,, Connectivity Whitepaper 7 “The Chinese are fully devoted Ever-faster connections to their tasks and they see 4 between China and Europe opportunities everywhere,” If you have your products manufactured in China, you want them to reach their destination, e.g. Europe, as soon as possible. Good news: the Chinese government has introduced a large-scale investment programme to improve its infrastructure and to increase connectivity and cooperation Typically Chinese: an 5 between Eurasian countries. The programme entrepreneurial and connects Chinese industrial cities to sixty optimistic work ethos countries across Europe, Asia, Africa, and Oceania. A railway connection between China In January of 2018, 1,500 Chinese workers built and several European cities, including Tilburg a railroad for a high-speed train. How long it and Rotterdam in the Netherlands, is part of took them? A single night! This illustrates the the initiative. This train can make the trip to typical Chinese work ethos, which is all about Europe in fifteen to eighteen days, making it decisiveness, optimism, and entrepreneurship. more than twice as fast as any container ship. “The Chinese are fully devoted to their tasks Compared to airfreight, the train is cheaper and they see opportunities everywhere,” and offers a reduced environmental impact. Machiel van Reenen says. “The people here are very flexible about where they work, whom The local infrastructure has also improved a they work for, and what kind of work they lot over the past few years. Nowadays, you do. Carrying out repetitive tasks is nothing can travel by train from Shenzhen to any place unusual, especially amongst older generations. in the Greater Bay Area in just one hour. The What matters most to them is that they can development of airports, harbours, rail roads support their families. Young people often and the enormous bridge between Hong look for a bit more of a challenge in their work. Kong, Zhuhai and Macau, which also includes They are more likely to pursue a career as a tunnel, makes for easy connections in the e.g. an electronic engineer, a quality engineer, area. The bridge – which cost more than $ 10 or a process engineer.” The Chinese people billion – reduced the travel time between Hong keep searching for the right solutions.