US manufacturer Gore plans further Shenzhen investment
Updated: 2012-06-06 07:10
By Qiu Quanlin in Shenzhen (China Daily)
Despite less foreign direct investment going into China, the US-based W. L. Gore & Associates Inc, a leading manufacturer of advanced technology products for the electronics, fabrics, industrial and medical markets, plans to increase its presence in China by investing more in its Shenzhen plant this year.
Gore, which entered China about 10 years ago, plans to invest about $20 million in a second fabric plant in Shenzhen this year.
The new project comes after Gore has already spent more than $70 million in Shenzhen in the past decade. It is expected to help the company increase its annual sales by 50 percent.
"Gore Shenzhen is the hub for our Asia-Pacific businesses, and we continue to invest in building what we refer to as a 'cluster' in Shenzhen, which has proved to be a successful model to co-locate business units, functions and other support infrastructure in a common location," said Terri Kelly, Gore president and CEO.
By taking advantage of propriety technologies that incorporate the versatile polymer polytetrafluoroethylene, Gore has devised numerous products that can be used in electronic signal transmissions, fabric laminates, medical implants, as well as in membranes, filtration, sealants and fiber technologies for industries.
The Shenzhen plant is Gore's first fabrics manufacturing plant in Asia. It also makes high-frequency coaxial cables and protective, automotive and packaging vents.
"We know this is a very exciting growth region for the company, so the investments that we will be making for the next several years will be there for the long term," she said. "This is very important to sustain the growth we've already enjoyed in the Asia-Pacific region."
The company, headquartered in Newark, New Jersey, had about $3 billion in sales in 2011. In the past five years, the compound growth rate for the sales figure has been about 10 percent.
"We have made great progress in the development of the Shenzhen cluster," she said.
Gore's continued investment in Shenzhen comes as a contrast to the decreasing amount of foreign direct investment that has been going into China. Such investment declined for a sixth month in a row in April amid the world's economic troubles.
In April, the value of foreign direct investment into China decreased by 0.74 percent year-on-year, hitting $8.4 billion, the Ministry of Commerce said.
The first four months of the year saw investment from the US, one of chief sources of foreign direct investment into China, edge up by 1.9 percent year-on-year, after it had declined by 26 percent in 2011, according to the ministry.
Even so, many US business people and commerce officials believe that China is still an attractive destination for US investments.
Myron Brilliant, senior vice-president of US Chamber of Commerce's international division, said previously that China's large economy and its population of 1.3 billion do much to attract US investment to China.
"US investment in China is changing slowly," he said. "There is a desire among US investors to manufacture and produce here and sell to the domestic market."
Timothy Ziegler, a founding partner and president of China operations for Millrace Enterprises LLC, said: "I believe the current slowdown in investments by US firms in China is more about the aversion to risk many US companies are displaying as a result of the global economic conditions for the last four years, and less about their lack of need or desire to invest here."
Millrace is a US-based marketing, sales, and distribution company specializing in helping small to medium-sized US companies enter the Chinese market.
"Many of our clients quickly realize they need to invest in China if they want to succeed here," he said. "And we encourage the investment once the customer need is solidified."
(China Daily 06/06/2012 page16)