China

Clothing Workers Looking for Action from Job Summit

Unions want the job summit to fix government procurement processes that have handed an Australian multinational the power to dress local troops in Chinese made uniforms.

Christchurch firm buys Swanndri brand

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The iconic New Zealand brand Swanndri has been bought by Christchurch apparel company Longbeach Holdings for an undisclosed sum. Longbeach, fully New Zealand owned, is an apparel supply specialist with operations in New Zealand, Australia, South Africa, UK and China.

It has been working with Swanndri for the past two years including developing new innovations in fabrications and styling.

Swanndri chairman Bryan Pearson, said the board and management of Swanndri had spent the past four years repositioning and growing the business. Two years ago Swanndri, which brands itself "a New Zealand legend,", decided to shut its Timaru factory and manufacture in China for economic reasons. "We all felt the time was right for a major company like Longbeach to come in and take Swanndri to the next level," Pearson said. "Longbeach has the expertise and infrastructure to support further growth of this great kiwi brand in New Zealand and international markets."

Longbeach chairman, Ken Sparrow, said it was a great deal for both companies and the Swanndri.

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CAPTION: NEW HOME: the Swanndri brand, which features designs by Karen Walker, has been bought by Christchurch firm Longbeach.

'Kiwi-made' Norsewear set to move to China

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The future of clothing company Norsewear hangs in the balance, its owners saying they will decide this week whether to sell and sources saying the deal is already done and production may move to China.

The farming and ski wear clothing company celebrated its 40th birthday this year and has stressed in the past that it is a "Kiwi-made" company.  Norsewear exports clothing and many apparel companies, including Swanndri and Wellington-based Icebreaker, have already moved manufacturing overseas because of a high Kiwi dollar.

Norsewear director and managing director of Burleigh Evatt, the company's majority shareholder, Ian Fitzgerald said a final decision would be made this week but declined to comment further.  Sources said the company had been sold and plants in Wanganui and near Dannevirke might be closed and manufacturing moved to China.

Each factory employs about 30 staff.

A National Distribution Union official said it was told an announcement was due tomorrow.

The former owner of Barkers Men's Clothing, Ben Nathan, is understood to be the buyer.  Mr Nathan set up a company called Norsewear Brands in mid-July.

The makeover

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WHEN WE last featured Cambridge Clothing, back in 2001, it planned to keep manufacturing in New Zealand “as long as it makes sense”. Six years on, it makes less sense than it used to. Last year the company had 25% of its output manufactured in China and that figure is expected to rise to 50% this year, due to what Cambridge’s marketing manager Kim Macky calls “the changing shape of the marketplace”.

Outsourcing to China has resulted in its now 250-strong workforce being cut by about a fifth. The good news is the company continues to utilise its Auckland manufacturing plant for its own designs, and also contract manufactures on behalf of others, which now accounts for about a quarter of its output. “All the manufacturing plants in Australia have closed now so our manufacturing plant in Auckland has been very busy although it’s coming down from a high 12 months ago due to the high Kiwi dollar.”

So making some suits in China is a big change but the biggest transformation has come since the clothing company underwent a Better by Design audit in 2005. “That’s fundamentally changed the shape of our business,” Macky says. “Design and branding will play a more significant part in our goals and targets than just being a manufacturer and wholesaler.”

The company has spent the past two years reshaping its management structure, including setting up a head of design, Nicholas Blanchet, a Kiwi who heads the design team based in Australia. Some 65% of Cambridge Clothing’s production is exported to Australia. Although the company has dabbled with exports to other countries it views the Australian market as the most compatible with its Auckland-based business and one in which there is still plenty of room to grow.

Currently Cambridge has ten stores within Australian department stores and as part of its design-led makeover plans to open a number of its own standalone stores across the Tasman in the next year. It has no plans to follow suit in New Zealand, though, because of the smaller size of the market here.

Cambridge is still owned by the Macky and Goodfellow families who founded the Auckland company in 1934. Macky says the company will continue to be based in New Zealand, tailoring its business to premium-priced brands. “We foresee a New Zealand-based manufacturing operation being sustainable for the foreseeable future but what size it needs to be is the question.”

EPMU: Urgent manufacturing review needed

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The Engineering, Printing and Manufacturing Union says it will spearhead discussions to find ways of keeping local manufacturers in New Zealand.

It follows Fisher & Paykel's announcement on Thursday that it will shift its laundry factory to Thailand to save an estimated $10 million a year, with the loss of 350 jobs in Auckland.

Sleepyhead, the country's biggest bed manufacturer, is also considering moving its operations to China next year. It employs about 500 people in New Zealand. About 250 jobs are expected to be lost.

The union's national secretary, Andrew Little, says an urgent review of manufacturing policies is needed to prevent a mass exodus overseas.

Mr Little says he plans to assemble representatives from the business community, other unions and the Government to discuss incentives for manufacturers to stay in New Zealand.

Sleepyhead managing director Graeme Turner says high interest rates and a huge array of costs have led it to look at China as a manufacturing site He says the only things that would keep Sleepyhead in New Zealand are a drop in interest rates and a change in government policy.

The Canterbury Manufacturers Association says it is the same situation for many manufacturers and warns that more will either leave or go under. Spokesman John Walley says manufacturers are being abandoned.

The Employers and Manufacturers Association says it makes sense for companies to move overseas because the business environment in New Zealand is not good.

Chief executive Alasdair Thompson says it is a mess for exporters trying to operate in the face of high taxes and other costs.

He says countries such as Thailand and China are offering manufacturers tax cuts and cheap land to help them to get started.

Manukau mayor Barry Curtis believes workers set to lose their jobs at Fisher & Paykel's east Tamaki plant will easily find work elsewhere.

He says "hundreds of jobs" are going spare in the district each month and it is unlikely that his constituents will be unemployed for long.

The Government says it acknowledges the pain many exporters are feeling but says it has an economic strategy to help.

Prime Minister Helen Clark says there is still a place for manufacturing in New Zealand, despite some companies shifting their production overseas She says what is happening in New Zealand is typical of many developed countries where manufacturers are moving their operations to low-cost countries.

Miss Clark acknowledges the high value of the dollar is causing problems for exporters, but points out that the Australian and British currencies are also at 25-year highs against the US dollar.

Minister of Economic Development Trevor Mallard says it is unfortunate some manufacturers feel they are being forced overseas, but the sector is changing. It is difficult to compete against other countries that supply cheap labour and land.

He says options apart from capital gains tax and mortgage levies need to be explored to try to help businesses that are struggling.

Mr Mallard says New Zealand must focus on high-end manufacturing that come from local research and design initiatives. Any wide-ranging change to monetary policy would need to have the support of all the main political parties.

The National Party says the Government should be doing what it can to help struggling businesses.

National finance spokesperson Bill English says the Government needs to stop charging record amounts of tax and change the business environment. He says the Government also needs to rein in its own spending, which would take pressure off interest rates and the dollar.