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Firms told to look to the East
( 06 / January / 2005 )
Companies looking to outsource production could benefit from investing in Eastern Europe rather than solely concentrating on India and the Far East, it has been claimed.
“British manufacturers must be more strategic in their future decision making,“ said automotive and aerospace specialist Gary Turner, Midlands based director at PricewaterhouseCoopers.
Mr Turner said: “There is a growing interest in Eastern Europe as an outsourcing destination for manufacturers as it offers a viable alternative to Indian and Asian sources, both for large and small-scale manufacturers.“
“While the cost of manufacturing in Eastern Europe, in terms of direct labour rates, can still be around twice that found in India and Asia, it is still approximately one twentieth of that found in the UK, with the additional logistical and infrastructure benefits of manufacturing in mainland Europe.“
Mr Turner said the Ukraine, Slovenia, Bulgaria and Poland are beginning to emerge as the future centres of manufacturing in Eastern Europe alongside the Czech Republic where Original Equipment Manufacturers (OEMS) have all recently located major manufacturing operations.
He said: “The region is able to offer a continuity of supply to European markets, good language skills and a rapidly growing skills base alongside the beneficial trend towards removal of trade barriers within the European Union.“
“This presents a viable alternative to companies that previously looked to India and Asia for a solution where, in both cases, manufacturing remains very strong due to global outsourcing demand.“
Mr Turner said the Chinese economy continued to grow at an impressive rate largely due to its huge, though relatively low-skilled, manual labour market.
He said: “This leaves UK companies in a position where a bespoke, strategic approach to outsourcing is essential when choosing which subcontracted manufacturers to work with, and where they should be based.“
Source: Birmingham Post, 06-01-2005