Graphic to expand machinery investment in Dongguan, China plant to around £32 million

Citation

(2010), "Graphic to expand machinery investment in Dongguan, China plant to around £32 million", Circuit World, Vol. 36 No. 3. https://doi.org/10.1108/cw.2010.21736cab.001

Graphic to expand machinery investment in Dongguan, China plant to around £32 million

Article Type: Industry news From: Circuit World, Volume 36, Issue 3

The decision to open a plant in China is paying dividends for one of Devon’s longest established hi-tech firms. Graphic, the printed circuit board (PCB) manufacturer based in Crediton since 1968, now employs around 360 people at its factory in Dongguan. Opened in 2007 in a joint venture with Italian firm Somacis, the plant now has a turnover of £23.5 million. Of the products, 70 per cent made there are sold to the Chinese market, which previously imported the technology from Japan.

Graphic’s Executive Chairman Rex Rozario said the success of the Chinese venture was bringing export revenue back to Devon. Graphic was the last overseas company in its field to get a government licence to set up in China. Consequently, it has become a ripe takeover target for rival American firms eager to get a piece of the action – not that Mr Rozario has any intention of selling up.

“Everybody wants to be there – if you are not in China in the future, you are dead,” he said. Workers at the Dongguan plant are housed in a dormitory building alongside the factory, a normal practice for large employers in China. “They come from all over China, mainly the interior, and some of them are not even used to using toilets, but they are very good workers,” said Mr Rozario. The plant has an entirely indigenous workforce, with the exception of two Europeans, including a Finance Director from Exeter.

Its capacity is set to increase further, with plans for a £4 million investment in new machinery which will pave the way for turnover to rise to around £32 million. Back in Devon, Graphic employs around 170 people at its Crediton headquarters, 70 per cent of whom have worked for the company for at least ten years. Turnover of the firm’s UK operations is around £13 million. The company’s circuit boards are used in applications ranging from medical scanners to Formula 1 racing cars and the Eurofighter Typhoon jet.

Mr Rozario explained there was no overlap between the work done at the plants in China and Crediton, with the most sophisticated technology developed and manufactured in Devon, while less advanced, higher volume products were made in the Far East. One reason for the split is that, by law, products for defence and aerospace applications cannot be made outside this country. Even so, the circuit boards produced in Dongguan – used in mobile phones, power stations and medical equipment – are at the more complex end of the Chinese market.

“For them to get to our stage will take another 10 years,” said Mr Rozario. “By that time we will have moved on to new technology, so we are developing new products all the time.” Wind power and other sources of renewable energy are among the frontiers being explored by Graphic. “There are a lot of things happening in the background,” said Mr Rozario. As a pioneer in establishing a lucrative foothold in China, Graphic is working with the South West Regional Development Agency to share its expertise. And despite the growth of its Chinese operations, Graphic remains committed to Devon. “It’s going to stay in Crediton and run for ever and ever,” said Mr Rozario. “It is a great place to live and we are proud of being here.” Whereas in China we are making big margins, here we are developing new technology and have sustained the business and still made a profit through the worst recession we have ever seen.

“Turnover has held steady but profit has dipped because it is a recession and people are price conscious. For 42 years we have been managing to stay alive. We have been through recessions before and have never had redundancies.”

With acknowledgements to the Express & Echo, Exeter.