Perlos expanding in China
"Unfortunately, jobs will disappear somewhere else"
Perlos, a Finnish manufacturer of plastic components of mobile telephones, plans to open three new factories in China.
On Monday, the company opened an extension of its Beijing factory. New factories are already being built in Beijing and two other locations.
Perlos employs more than 2,300 people in China, who account for more than a third of the company's entire workforce.
It is predicted that 40% of the world's mobile telephones will be manufactured in China in 2008.
"The strongest growth is here. That is why investments come here", said Kari Sohlberg, Chairman of the Board of the Perlos plant in Beijing. The complex is part of a chain of production in which Nokia and its main subcontractors operate within walking distance of each other.
The increase in production in China is happening at a time when Perlos is holding talks with personnel on the planned closure of its plant in Ylöjärvi.
"It is not a question of moving production. Workplaces are emerging here. Unfortunately, they are disappearing from other places", says CEO Isto Hantila.
"We are here because our customers are here. It is necessary for us to be logistically close to them. The pace of production is so intense that it is not possible to ship components from the other side of the world."
Perlos began its operations in China in the wake of Nokia, but while it has been there it has acquired other customers. In Beijing it also produces components for Siemens, for instance.
The first Perlos plant in China opened in 2000. Hantila estimates that next year more than a third of the company's production capacity will be in China.
The minimum wage for factory workers varies in different parts of China, but it is usually between EUR 60 and EUR 90 a month. Nearly half of the workers at Perlos factories in China are temporary. The number of personnel varies according to what products are in demand at a particular time.
The company gets employees from recruitment agencies - sometimes for just a week or two at a time.
"It allows for flexibility and cost-effectiveness. We are better able to maintain profitability", says Kari Häyrinen, head of the Asian operations of Perlos.
Social security for the employees is up to the agencies, and organisations concerned with fair labour practices say that regulations are often violated.
Häyrinen says that Perlos is currently investigating the practices of the recruitment agencies it uses.
"We naturally have a moral responsibility for how our subcontractor network operates."
Perlos recently opened a new factory in Hungary, and is building facilities in Mexico.
"Finland will still have the role of expertise in technology", Isto Hantila insists.
Perlos has people in Beijing working in product design, but not in actual research and development, which the company will keep largely in Finland.
"Naturally not exclusively. Many new technologies are born here in Asia - Taiwan, Korea, and China. We have a network of partners here, but probably in the future we will also have our own personnel working in product development."
Previously in HS International Edition:
Finnish technology companies experience strong growth abroad (29.4.2005)
Perlos to shut down Ylöjärvi component factory - 600 jobs on the line (28.4.2005)