Moves to reshore signal a gradual return to 'Made in US'

By Paul Welitzkin (China Daily) Updated: 2015-02-04 07:27

Inventory management is an even bigger reason than labor costs for some manufacturers.

Anthony Parisi is a vice-president of Plastimold Products Inc in Delray Beach, Florida. The company has annual sales of about $2 million making molds used to manufacture combs and medical products.

Plastimold has eight employees and may have to add up to 10 more to make a mold for a medical product that was made in China.

"We are building a mold for a customer who has been in China. Even though it will cost more to do the mold here, he wants that because of the proximity. It's worth it to him because he can drive over to us and make changes in a day. Plus he doesn't have to speak Chinese," Parisi said.

Reshoring to the US is being supplemented by Chinese companies moving manufacturing operations to the US for many of the same reasons US companies are returning.

Chief Executive Officer Xin Hu developed Taizhou Fuling Plastics Co Ltd in China, starting with a small factory with 10 employees. It now employs more than 1,200 people. Taizhou Fuling makes plastic cutlery, cups, plates, straws and other tableware items for fast-food restaurants.

Later this year, Fuling is scheduled to open a plant in Pennsylvania that is expected to employ 75 workers who will make and ship straws.

Bob Chapleski, vice-president of operations at Fuling Plastics USA, said that 40 percent of the company's sales are in the US. "He (Xin Hu) had been looking to move some of his production here. The biggest driver of this was freight costs. It just got too expensive to ship plastic straws from China to here."

Production of the cutlery and bowls will remain in China for now, but if the Lehigh Valley facility works out, Chapleski said Fuling may move more production to the US.

"Increasingly Chinese companies are establishing manufacturing operations in the US," said Moser.

Another factor that figures into the reshoring equation is the marketing appeal of "Made in America".