"Made in Denmark" might be better than "Made in China". An increasing number of Danish companies choose to move their production back home from China after concluding that they are better off here than in the Middle Kingdom.
During the last years, China’s economic boom has pushed the prices of goods and salaries up. When that is added together with the inevitable language barriers and difficulties in getting the work done, companies decide that it is not worth their while outsourcing the production to China.
One of the companies is T-Rex who makes pedals for music instruments. For seven years, the company had a production unit in China, but now they are planning to move it back to Denmark.
- China is experiencing massive growth which has made the prices of salaries, taxes and raw materials increase. This trend started a while ago and is likely to continue. At the same time, production in Denmark has becoming more affordable due to the economic crisis, because companies have had to streamline and automate their business, says Director Steen Meldgaard to the Danish newspaper MetroXpress.
Cultural barrieres make production in China difficult
Assistant Professor Peter D. Ørberg Jensen from Copenhagen Business School confirms the trend:
- Everything made in China becomes more expensive, and especially in the south-eastern part of China, there has been a certain wage push. These factors will strengthen the trend of more companies moving back to Denmark, he says.
Other Danish companies realise the complications of outsourcing the production to a country where cultural differences often make work procedures go not so smoothly.
- Too many things just didn’t come out the way we wanted it, says Ilse Jacobsen from the clothing company Ilse Jacobsen, who decided to move their production of shoes and clothes back to Denmark.