Fantastic Plastic
Sunday, March 9th, 2008Just read this for an example of Chinese economies.
A friend of a friend in the UK, manufactures small injection moulded plastic pipe fittings. He is aware of my business dealings in China and asked if I could source a manufacturer for some component parts. I introduced one of his products to two different companies. As an example for you, company A’s tooling price was 310,000 YUAN and company B’s 274,000 YUAN, in sterling approx £21,000 and £18,500 respectively. The price for the production of the parts were roughly the same at 32 YUAN and 34 YUAN, approx £2 each.
The UK price on exactly the same product which he has been buying for over 3 years is nearly three times the price but get this……….the tooling cost which he had to pay for in full was £65,000. When he confronted his UK supplier he shrugged as though…..’whatever’, then reduced his price by 38%. What are these people on???… Suffice it to say he is now coming out to China with me next month to conclude negotiations and hopefully he will begin to put more of his business into a country that is keen for the work and even keener on price.