Date
26 September 2017
Hong Kong is becoming an option for manufacturers as costs rise on the mainland. Photo: Bloomberg
Hong Kong is becoming an option for manufacturers as costs rise on the mainland. Photo: Bloomberg

Making the manufacturing move back to Hong Kong

Three decades ago a flood of manufacturers flowed across the border to the mainland but that tide could be turning with at least one company, Hong Kong-owned garment firm Grandion Industrial Ltd., heading home to revive its operations in the city.

Ming Pao Daily reported Monday that Grandion has spent over HK$10 million setting up a factory in Tsuen Wan and hired more than 100 knitting machine operators and a dozen or so fashion designers to get production up and running.

Manufacturing made up about a third of Hong Kong’s gross domestic product in the 1970s but the share started shrinking in the 1980s and by 2012 was down to just 1.6 percent of the economy.

Industries like the garment and jewelery sectors moved north to the mainland to take advantage of low production costs.

Hong Kong Young Industrialists Council chairman and Grandion managing director Alan Cheung said wages on the mainland have risen five-fold in the last eight years, forcing business owners to rethink their options.

Northwest China and Southeast Asia were not viable options for Grandion so the decision was made to move back to Hong Kong.

Cheung also said he has also spent over HK$6 million buying two digital garment printing machines from Israel to enable the factory to make more than 10,000 items in three days.

Hong Kong has been criticized for lacking variety in its industries and for not putting policies in place to address the issue.

Many Western countries, such as the United States, have been trying to lure local firms to move their overseas operations back home, as operating costs and wages rise offshore.

One industrialist specialising in loudspeaker manufacturing said there is a serious shortage of mid-tier technical personnel in Hong Kong, making it difficult for his company to set up a high-end factory in the city, the report said.

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EL/AC/SK

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