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| Chinakey's factory in Cambodia |
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To bolster competitiveness, many companies have chosen to set up factories in lower-cost countries and Chinakey (Hong Kong) Ltd is one of them. As the knitwear manufacturing subsidiary of Hong Kong-based Addchance Holdings Limited, Chinakey has been operating two knitting mills in Cambodia, on top of production facilities in China. Francis Tsang, Director-in-charge of Chinakey's Sweater Knitting Section, shares with ATA the company's development in Cambodia, a strategy of the company to raise its production efficiency.
ATA: Chinakey is a manufacturer high volume, quality knitted sweaters for over 1,400 clients in over 16 countries. What drove it to set up mills in Cambodia?
Mr Tsang: We invested in production facilities in Cambodia in order to raise our production efficiency. They carry out knitting, linking, and finishing processes. With them, we ship knitted sweaters directly from Cambodia to Europe and the US. This effectively increases production efficiency, reducing costs and dependency on subcontractors and hence giving our customers peace-of-mind on their orders. Also, our mills in Cambodia deploy 200 state-of-the-art computerized machines in order to reduce the use of the human resources and lower the production costs. At present, our mills in Cambodia produce over 200 million pieces of hosiery and about 300 million dozen socks yearly. They include men's, women's and children's hosiery, as well as long socks, pant socks and terry sport socks.
ATA: You mentioned the use of advanced machinery to lessen the dependence on labors, of which Cambodia is suffering from a shortage now. What machines do you have in your mills in Cambodia?
Chinakey adopts Stoll’s knitting machines in its factory in Cambodia |
Mr Tsang: We have installed Stoll's computerized knitting machines in our factories in Cambodia. We have also employed 200 state-of-the-art computerized machines, as well as 730 sets of advanced hosiery machines (DK-B318 Golden Series fully computerized hosiery machines manufactured by Taiwanese Da Kong Enterprise Co). With them, we are able to resolve the problem of labor shortage in Cambodia.
ATA: As far as knitwear is concerned, what distinguish Chinakey's products from those of your competitors?
Mr Tsang: With an established reputation of high quality and reliability, we manufacture for world renowned multi-national fashion chains. By offering a broad product range and creative design innovation, our team is able to satisfy even the most demanding customer needs. We keep on-hand a large library of yarns and sample knit panels. This offers clients an immediate sample of the industry's most up-to-date colors and designs. Chinakey also has a comprehensive sweater library where we keep on-hand a vast collection of each season's most popular styles. This provides our customers with variety and information so that they can make informed, profitable decisions.
ATA: What are the biggest challenges to Chinakey at the moment? How is your company coping with them? What is your company's strategy to expand your market in future?
Mr Tsang: While the Cambodian labor force is a key challenge because of the rising wages, we are also facing fierce competition from Bangladesh because of the reduction of unit prices, and a lot of orders have been moving to Bangladesh. Buyers always put Bangladesh as their first priority in placing orders, while Cambodian textile manufacturers are their second choice. In order to continue our development in Cambodia, our strategy is to increase the use of computerized machines, and on the other hand, decrease our dependence on the manpower, and hence reducing our overhead to control the expenditure. Compared with Vietnam, Indonesia and Thailand, Cambodia is still enjoying lower wages.
For the full version of this article, please refer to the forthcoming Feb/Mar issue of ATA Journal.
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