My first time in China was more than 12 years ago (I had not yet joined Panini). \u00a0At that time, their labor cost was almost negligible – compared to the western world. They also had a lower cost for energy and the raw materials were cheaper compared to western standards. Nobody doubts China production was a good business opportunity despite requiring many efforts to find the right partner and manage complicated logistics – unusual for our Panini team – to achieve good quality products and stable production.<\/p>\n
I do not think of myself as a China expert, but from what I can tell after some years; I cooperated with very good companies, met highly committed and competent teams and some of the kindest people I have ever met in my life actively supported Panini business and made possible a reliable and winning partnership. I will also share I have eaten some of the sweetest and freshest lychees in the world (thanks, James) and have drank some great green teas during my visits to China, but that is another story \u2026<\/p>\n
However, the World keeps moving forward. I have seen a growing world commercial power, an improvement of the average quality level (also in lifestyle I should say), and better logistics in China. But, on the other hand, I have also seen an increase of the labor cost (and energy as well), the (good quality) raw materials costs becoming aligned with the western ones, electronics components as expensive as in EU or USA (or even more, in some cases) and so on. \u00a0It is easy to understand these negative effects on Panini\u2019s business.<\/p>\n
In the meantime, other areas in the World increased their production capability, their quality levels sometimes in conjunction with easier logistics, making them more attractive for our business.
\nThe recent changes in import duties in USA (+10%), the possibility of further increases (+25 %) and the uncertainty for the future represented the icing on the cake that made moving our production out of China more convenient than to keep it there.<\/p>\n
I will not bother you with details (maybe another time) but, due to the current Supply Chain organization, moving the production to Romania is our best option; and we are rushing to achieve it \u00a0as soon as possible.<\/p>\n
All that said, you might ask whether all that is a farewell to China or not, and my answer is “absolutely no” for reasons despite our cooperation being different:<\/p>\n
So, instead of saying \u201cfarewell\u201d, let me say \u201csee you soon\u201d to all our Chinese friends.<\/p>\n
<\/p>\n
Manlio Lombardo <\/p>\n
Supply Chain Director, Panini <\/p>\n","protected":false},"excerpt":{"rendered":"
Manlio Lombardo, Panini\u2019s Supply Chain Director discusses why \u201cfarewell to China\u201d probably represents an erroneous assessment of China\u2019s role in global business. <\/p>\n","protected":false},"author":1,"featured_media":3693,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[23],"tags":[],"acf":[],"yoast_head":"\n