(photo credit: Courtesy)
A new industrial incubator situated just 45 minutes by train from Shanghai will
give Israeli manufacturers “a competitive advantage,” one of the men behind its
creation said Monday.
“Today, foreign companies must invest in local
[Chinese] production in order to maintain their competitive advantage, but many
Israeli companies are discouraged from doing so because of uncertainty over
their sales success,” Zvi Shalgo, chairman of the Israeli Chamber of Commerce in
Shanghai and founder and CEO of the PTL Group, said at the unveiling in Tel Aviv
of the Changzhou Industrial Incubation Initiative.
The PTL Group, in
partnership with another Israeli-controlled company, Elan Industries, founded
the incubator on a 13,000-square-meter plot of land in the Wujin Economic
Development Zone in the eastern province of Jiangsu.
The incubator, which
will cater mainly to Israeli companies, will provide its tenants with local
production and management support, Shalgo said, adding that it would take a cut
from all sales made by companies using its facilities.
companies have already committed to opening production plants, beginning with
Makhteshin Agan subsidiary Lycored, which will open its Changzhou operations in
September, he said.
Lycored CFO Shai Givon said the dietary-supplements
manufacturer had $90 million in sales in 2010 to large multinationals, including
Kelloggs, Nestle and Herbalife, but understood that if it didn’t open a factory
in China within a few years, “we would be out of the picture.”
you want to work with powerful multinationals, they are not prepared to [work
with you] if you have just one production plant,” he said.
“You need to
have at least two production plants, and it is preferable that you have at least
one in Southeast Asia, which is an expansion market for everybody.”
said the NIS 100m. fund expected to be set aside for Israeli exporters by
the Industry, Trade and Labor Ministry pales in comparison to the $150m. capital
fund that was recently established by the Changzhou local government – “just one
city” – to encourage foreign investment.
“The bottom line for Israeli
businesspeople,” he said, “is to get over there, to get to know people, to find
the location, to benefit from the assistance of those who have a lot of money –
and not to wait here for government supply.”
Wujin Economic Development
Zone chairman Lu Qiuming and deputy director of investment Zhao Dongliang also
attended the press conference. They said more than 80,000 companies have offices
in Changzhou, including 6,780 that are foreign firms and 44 that are listed in
the Fortune 500.
Dongliang played down the problem of labor
shortages. While reports about a lack of manpower in China were true, he
said, Changzhou has not been affected.