Friday, June 28, 2024

Decoupling China, going with India?

Via the New York Times: 

Melissa & Doug had a situation. For decades, the American toy brand had leaned heavily on factories in China to make its products — wooden puzzles, stuffed animals, play mats. Suddenly, that course looked risky.

It was February 2021, and the world was besieged by a pandemic. Lockdowns disrupted Chinese factories. Trade hostilities between Washington and Beijing were undermining the benefits of depending on plants in China. President Donald J. Trump had slapped tariffs on a broad variety of Chinese imports, increasing their prices, and President Biden extended that policy.

Melissa & Doug was eager to shift some production to other countries. Which explained the arrival of its chief supply chain officer at a factory in Greater Noida, a fast-growing city about 30 miles southeast of the Indian capital, New Delhi.

The factory was owned by a family business called Sunlord. The Melissa & Doug executive was surprised to see that the plant could make high-quality wooden toys, at prices comparable to those in China. Late last year, Sunlord completed its first batch of products for Melissa & Doug, a modest order of about 10,000 items, and now is cranking out 25,000 per month.

I presuming that consumer firms like Melissa and Doug and WalMart are simply diversifying their supplier base. It will be interesting to see if the Indian and South Korean pharma manufacturing markets grow as the BIOSECURE Act is actually passed (if it indeed is passed.) 

1 comment:

  1. Just finished reading "How the World Ran out of Everything" by Peter Goodman. Fascinating insights, and things I'd never thought about before. If you're interested in this topic, it's worth a read.


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