Salcomp having problems recruiting personnel after relocating factory to China

Company manufactures one fourth of world's mobile phone chargers

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By Sami Sillanpää in Shenzhen, China
     
      A Chinese woman pushes a circuit board into its cover and passes the product to the woman sitting next to her, who attaches a cord to the housing. The next one packs the ready mobile telephone battery charger into its box.
      This is how the factory of the Finnish company Salcomp Shenzhen, a large industrial city in the south of China, operates. Work continues 24 hours a day, on nearly every day of the year.
     
Salcomp came here under a cloud of controversy. When shut down all of its production in Finland in 2003, focusing it on Schenzhen, a debate ensued about a "China syndrome". Finnish companies had been investing in China for years, but the relocation of Salcomp became a symbol of how industry is moving east, chasing after markets and inexpensive labour.
      Things have been going well for Salcomp in Schenzhen. From 2003 personnel has more than doubled to 6,600. They include four Finnish managers.
      "This is the world's largest single mobile phone charger factory. Nearly one in four chargers in the world come from here", says factory director Pekka Kyyriäinen.
     
The operational environment has also changed in four years; the China syndrome has taken on unexpected characteristics.
      "It has become significantly more difficult to get labour", Kyyriäinen says.
      In the autumn of 2003 it was enough to put a sign by the gate, and soon there was a long line of job applicants at the door. Instead of a small paper sign, the outer wall of the Salcomp factory has a large sheet hanging from it: "Women workers wanted - good pay".
     
The labour shortage is attributable to regional disparity in China. The Salcomp factory is in Guangdong Province, which has China's most extensive concentration of industry, where most factory workers are migrants from poor areas.
      Guangdong is not attracting as many people as it used to, because economic growth in China has penetrated more deeply into the interior of the country; rural people are finding work closer to home.
     
The labour shortage has not cut back on Salcomp's growth, however.
      Workers are being found, but somewhat more slowly than before. The clean, five-storey factory is buzzing with young people, mainly women, in white coats.
      "I came to Shenzhen, because I wanted to try life away from home in a big city", says An Yuanyuan, who assembles chargers on the production line.
      The 19-year-old woman came to the Salcomp factory from the poor Gansun Province, nearly 2,000 kilometres away.
     
To attract more people to ease the labour shortage, the local government of Shenzhen has raised minimum wages by nearly 20 per cent in the past two years. Salcomp pays above the minimum. The basic pay for an assembly line worker is 780 yuan, or about EUR 80 a month. There is no bonus for night work, but there is for overtime.
      "The pay is all right", say An, a bit awkwardly, as her supervisor listens.
      Earlier in the autumn the workers at Salcomp's competitor, the German company Friwo, went on strike to demand higher wages. The Friwo factory is a few kilometres away from Salcomp.
      Salcomp last had a strike three years ago.
     
To keep its workers, Salcomp has sought to improve their living conditions. Most of the workers live in a dormitory in the factory area, as is common practice in China.
      The dormitory includes a library for the workers, a computer room, and a free health clinic. One room sleeps 10 to 12 people.
      A renovation is underway in the building in which the rooms are being upgraded, and the toilets are being moved away from the hall, so that they will be in conjunction with the rooms. The accommodation is free, but the workers pay for electricity and water.
     
In addition to wages, the price of electricity and water have increased in Shenzhen. Taxes are on the rise; known as a place of cheap production, the city is gradually becoming more expensive.
      "The increase in costs is quite significant. The profit margins of our business are small, so keeping costs under control is important", Kyyriäinen says.
     
Helsingin Sanomat / First published in print 13.10.2007

More on this subject:
 Communist Party section established at Salcomp

Previously in HS International Edition:
  Helsingin Sanomat enquiries suggest impact of "China Syndrome" relatively minor (19.6.2004)
  Salcomp to close charger plant in Kemijärvi; all production to transfer to China (11.9.2003)

SAMI SILLANPÄÄ / Helsingin Sanomat
sami.sillanpaa@hs.fi