While showing around his factory

The company, based in Shenzhen, Guangdong province, plans to open the new facility late this year in the nearby city of Zhongshan, more than doubling its mold making capacity and adding 20 injection molding machines to broaden its business.

Revenues have increased in the aftermath of the 2008 recession in the United States, particularly from the auto components market as American companies look to hold down costs, said owner and President Michael Zhao, in a June 28 interview at the company’s factory in Shenzhen.

"The U.S. market is down but they need to save costs," he said. "They need to find resources in other countries."

New Star, which employs 120 in China, set up a U.S. sales office in 2007, in Bantam, Conn., and also has one in Denbighshire, the United Kingdom. It has agents in France and Brazil, and is looking for representatives in other countries, including Germany, Zhao said.

The investment in the new factory, sizable for a company of its size, suggests that for all the very real talk of rising costs in China, some companies are adapting.

For New Star, that has meant investing in its first German CNC machine, with triple the speed of the Taiwanese models it also uses, and finding ways for workers to be more efficient.

Wages are rising sharply, up 20 percent since 2008, with the company’s average mold maker salary at about 5,000 Chinese yuan ($773.50) a month, Zhao said.

But even with those costs, he estimated that the company’s final cost for molds is still 50 percent cheaper than typical North American molds.

As well, he said the strengthening Chinese yuan, which cost it some contracts a few years ago in its housewares and medical business, has proven to be manageable.

"The rising costs are not a serious problem," Zhao said. "We are trying to improve our staff quality and efficiency and shorten the lead times."

The company recently hired 30 students from local moldmaking colleges and is training them, and has tried, without success so far, to find moldmakers from the U.S. or the U.K. to come to China to conduct training.

"The biggest challenge is training workers," said Zhao, who founded New Star in 2001, after getting a college degree in moldmaking and working in the local industry for 10 years.

A job working as an export manager for one Chinese mold shop convinced him that China’s 2001 entry into the World Trade Organization would bring a lot more foreign companies looking to source molds.

Right now, 100 percent of New Star’s business is exported, with more than 90 percent of that to the U.S. and the U.K.

The company is trying to grow its business in China’s domestic market, including in the auto and medical sectors, either focusing on state-owned firms or foreign companies operating there, he said. There is some auto component manufacturing in Zhongshan.

As well, the company is broadening its business model. Last year it opened a subsidiary, Shenzhen Zhaojia Precision Mould Components Co., making mold parts like ejector pins and sleeves. That company employs 60.

The new Zhongshan factory, which will more than triple floor space to about 23,000 square meters, will also have 20 additional injection molding machines, to go with the nine it currently has.

The company wants to do more injection molding work and finished product assembly work, Zhao said.

While showing around his factory, located in an industrial area of Shenzhen that he said has about 100 other moldmaking factories, he pointed out an assembly project of a telecom device New Star was doing for the Internet phone provider Vonage.

The firm had 51.7 million Chinese yuan (US$8 million) in sales last year, and is projecting over 64.6 million Chinese yuan (US$10 million) this year, he said.

On the block

Ford's St. Thomas assembly plant has gone up for sale for $22.75 million, and already there's "solid interest" in largest piece of commercial real estate to ever hit the area's market.

Commercial realtor C.B. Richard Ellis has had calls from manufacturers in sectors ranging from the automotive to green energy, kicking the tires on a possible sale, Randy Fisher, a broker with the realtor, said Wednesday.

"We are already encouraged. I would say there is solid interest," he said. "We are a global company and we put that message out, and there has been interest at various levels. I think there is opportunity here."

The sprawling, 44-year-old plant will close in September and take up to nine months to decommission, so it'll be available to a new owner in the summer of 2012, Fisher said.

"That is our job - to find an owner that brings jobs back to this area," he said.

It's likely the plant - since it is so large - will be bought by an investor and carved up for several users, essentially turning it into an industrial park, added Peter Whatmore, vice-president with C.B. Richard Ellis.
"It has been an important part of our business climate for (43 years) and has been a significant contributor to our local economy. This is a sad story," said Whatmore.

"It will be a significant challenge, but we have sold several of these across North America," he said.
"It will be tough, but we have a strong platform. We are optimistic," Whatmore said.

A vacant, 1.2-million-square-foot automotive plant in Windsor is attracting "substantial interest," he noted.
"We will get this done, but I'm just not sure what it will look like at the end of the day," said Whatmore.

While the looming sale had been common knowledge for months, seeing it listed has hit home for the plant's remaining 1,200 workers, said Scott Smith, chairperson of the Canadian Auto Workers union, Local 1520.
Still, a sale would offer hope a new owner might need workers - and the union would let an interested buyer know an experienced workforce is available, said Smith.

"We all knew the company was going to sell, but when you see it like that, there is a finality to it," he said. "The mood here is not good at all. It's becoming a reality as it gets closer."

About three years ago Ford of Canada also sold about 700 acres of land it owned - from the Ford plant south toward St. Thomas - for about $6.5 million to Bob McCaig, a St. Thomas businessperson who sold the Green Lane landfill to the City of Toronto for $220 million, said commercial realtor Dennis Broome, who chairs the St. Thomas economic development agency.

"I'm sure people will look at (the Ford plant)," Broome said of the plant. "It's close to Hwy. 401. It's a great deal."

It's "the end of an era" for the Ford plant, for many years the area's largest private employer.

"When you see a 'For Sale' sign go up, it is the end. It will not be saved," Broome said.

But there are many good signs in the St. Thomas economy, he added.

The Sterling Truck plant, home to 2,000 workers, was sold to Masco and it consolidated three different companies there, said Broome.

Two other plants near Sterling, where the former truck maker prepared its trucks and where it stacked them after, have been sold to different industries.

The Schulman Inc. plant was also sold to a Toronto plastic injection mould business that's now refurbishing the site.

"There are good things happening here," said Broome.