King & Country
Captain
- Joined
- May 23, 2005
- Messages
- 5,044
Hi Guys,
Re the above two interconnected subjects which a couple of collectors have brought up.
Strange as it may seem the world’s most populous nation does indeed have a labour shortage of skilled workers. Sadly, this is to be expected as “everybody and his brother” is moving their production capacity to the People’s Republic. China is, quite literally, what Britain was after the Industrial Revolution of the 19th century, the “Workshop of the World”.
Take the “toy soldier business” as one small microcosm of this situation. When we began manufacturing in mainland China back in the late 1980’s we were the first and only all-metal hand-painted toy soldier manufacturer doing that. Since then Frontline…Britains…Conte and half a dozen more have followed us in. I’m not complaining just stating the fact.
At the same time Southern China as a whole has a booming economy with growth rates of more than 10% per annum. Most factories there have bulging order books and need both extra energy and workers to keep up with the demand for their services and skills.
More energy requires more fuel…more product requires more raw materials…more work requires more workers and so on and so on.
Cost of living in China generally is on the rise…in Southern China, where most of our factories are located its astronomical, by Chinese standards
Workers recruited in distant, poorer provinces soon realize that their wages don’t go far enough to compensate for their expensive new life styles in the South. So, wages are on the rise…In Southern China, on average, workers wages rose by a staggering 25-35% last year alone.
Simultaneously fuel costs to transport goods as well as provide basic utilities at the factories also rose dramatically. Then there’s the raw materials…
It all adds up to a substantially more expensive basic cost structure than before. Speaking for K&C alone we’ve managed to absorb many of these additionals through increased sales and productivity…and reducing some but not all of our overheads.
At the same time being actually based in China and going into the mainland and traveling far and wide we’re able to “source” new factories and seek out favourable deals for both ourselves and our collectors. This is a major advantage we have over many of our overseas based competitors.
The People’s Republic of China is an economic miracle performing what, I believe, will ultimately benefit its people and its trading partners around the globe.
I’m just glad we’re in the right place…at the right time to take part in it.
Best wishes and …happy collecting!
Andy C. Neilson
P.S. Will there be price increases?
Probably yes, but not across the board. As I wrote earlier there are ways to absorb some and limit others. That’s what K&C will be doing. Nobody wants to price themselves out of the market – especially us!
Re the above two interconnected subjects which a couple of collectors have brought up.
Strange as it may seem the world’s most populous nation does indeed have a labour shortage of skilled workers. Sadly, this is to be expected as “everybody and his brother” is moving their production capacity to the People’s Republic. China is, quite literally, what Britain was after the Industrial Revolution of the 19th century, the “Workshop of the World”.
Take the “toy soldier business” as one small microcosm of this situation. When we began manufacturing in mainland China back in the late 1980’s we were the first and only all-metal hand-painted toy soldier manufacturer doing that. Since then Frontline…Britains…Conte and half a dozen more have followed us in. I’m not complaining just stating the fact.
At the same time Southern China as a whole has a booming economy with growth rates of more than 10% per annum. Most factories there have bulging order books and need both extra energy and workers to keep up with the demand for their services and skills.
More energy requires more fuel…more product requires more raw materials…more work requires more workers and so on and so on.
Cost of living in China generally is on the rise…in Southern China, where most of our factories are located its astronomical, by Chinese standards
Workers recruited in distant, poorer provinces soon realize that their wages don’t go far enough to compensate for their expensive new life styles in the South. So, wages are on the rise…In Southern China, on average, workers wages rose by a staggering 25-35% last year alone.
Simultaneously fuel costs to transport goods as well as provide basic utilities at the factories also rose dramatically. Then there’s the raw materials…
It all adds up to a substantially more expensive basic cost structure than before. Speaking for K&C alone we’ve managed to absorb many of these additionals through increased sales and productivity…and reducing some but not all of our overheads.
At the same time being actually based in China and going into the mainland and traveling far and wide we’re able to “source” new factories and seek out favourable deals for both ourselves and our collectors. This is a major advantage we have over many of our overseas based competitors.
The People’s Republic of China is an economic miracle performing what, I believe, will ultimately benefit its people and its trading partners around the globe.
I’m just glad we’re in the right place…at the right time to take part in it.
Best wishes and …happy collecting!
Andy C. Neilson
P.S. Will there be price increases?
Probably yes, but not across the board. As I wrote earlier there are ways to absorb some and limit others. That’s what K&C will be doing. Nobody wants to price themselves out of the market – especially us!
