Caldeira brings jobs back from China

CALDEIRA Group is to create 20 jobs at its UK base at Knowsley Business Park headquarters by bringing work back from its Chinese factory.

The company’s founder and chairman, Tony Caldeira, has been one of the region’s biggest promoters of trade with China and opened a factory near Hanzhou in the Zhejiang province in 2007.

However, he said that a five-fold increase in costs in coastal areas over the past eight years had convinced him to repatriate sewing work on some of its premium cushions, which attract higher duty rates than imported fabric.

He said that when he first launched his Chinese joint venture company in 2004 the average labour cost per worker was around £50 per month, but this has now increased to around £250. The cost of shipping and goods has also spiked.

“Of course, our UK staff still earn considerably more than our Chinese staff but productivity is higher in our Merseyside factory and the percentage of labour cost in more expensive cushions is relatively small,” he said.

“So when you also include other extra costs such as extra packaging, manufacturing profit, additional shipping costs and most significantly, the difference in duty rates between fabrics and finished goods, the cost differential between Chinese and UK cushion manufacturing reduces considerably.

“I never thought I would say this but certain cushion covers which are made from Chinese fabrics are now cheaper to produce in the UK than in China.”

He said the firm, which last year slipped to a pre-tax loss of £166,000 on sales of £21m, was now beginning its recruitment drive for sewing machinists and would use job centres and other methods to fill posts. He also said it would consider apprenticeships and the government’s proposed work programme.

The government’s work and pensions minister Chris Grayling visited Caldeira and several other Merseyside firms yesterday promoting the programme, which he described as a “short-cut to recruitment” for SMEs.

He said the programme could help to cut the cost of taking staff on for smaller firms, acting “like a dating service” to match company requirements with the necessary skills from agencies who are being paid on the basis of the results they achieve.

“I’ve been meeting lots of employers and we feel it will really work for them,” he said.

Mr Grayling added that the programme sat hand-in-hand with government efforts to reduce the deficit and to create the conditions for business growth – more of which he said would be revealed in next week’s autumn statement by Chancellor George Osborne.