DOING BUSINESS IN WEST AFRICA
MANUFACTURING, COMMODITY EXPORT, VIABLE CHINA ALTERNATIVE
For most of the modern world it is widely known that the cheap labor has given China a really solid standing in the manufacturing of everything from plastic knobs and lighting to car parts, concrete and clothing to name a few.
There are a number of companies in the United States and Europe that have opted to either outsource their manufacturing or build manufacturing plants in China due to the cost effectiveness of producing products at a lower cost basis thus increasing their net profits by a long margin.
Companies such as General Electric, Emerson, Honeywell and Rockwell are now developing automation plants in China to develop computer chips and parts etc, as well as outsourcing to China.
Companies such as General Motors, Procter & Gamble and Motorola are benefitting nicely from dealing with China on an import basis and on an export basis companies such as Wal-Mart, Target, Home Depot and others are showing their shareholders nice returns due to the high profit margins from their selling China exports in their retail chains.
Here are some fun facts:
Manufacturing in China today has seen a continual increase in manufacturing prowess, the cost advantages go beyond the simple cheap labor cost, China is beginning to produce higher quality goods which makes it even harder for the United States to be a viable manufacturing solution.
More or less 30% of all television and air conditioners, 50% of all cameras, 25% of all washing machine come from China and that is just the tip of the iceberg.
Wal-mart purchases over US$18 Billion worth of merchandise from China every year thus flooding the U.S. market with China imports, while 40% of all microwave ovens sold in Europe come from China.
The issue for companies that are seeking to reap the rewards of manufacturing in China is that they first must build a solid relationship with the local and national politicians in order to even get in the door to speak about their desire to build a manufacturing plant, its not as easy as buying a lot to build, there are many steps that need to be taken before you even have a chance to be approved for anything. It can be a lengthy process.
Over the last decade a number of non-China based companies have been flocking to China to manufacture and that it is increasingly making the countries economic stance stronger thus making it harder for companies to build in China and with the United States and Europe being the major importers of China merchandise there is a definite open door of opportunity elsewhere in the world.
