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High costs, poor quality.  “Migrant” companies say goodbye to China

High costs, poor quality. “Migrant” companies say goodbye to China

Rome, December 31, 2023 – For a group like Closing spiral in Naples To move production abroad, there are others who not only resisted the temptation to leave the country, but But they also decided to go the opposite way, Bringing production back home. Even abandoning those that were considered “paradise”, such as China, Korea, Romania or the Czech Republic. In technical terminology this phenomenon is called Resettlement In Italian we can translate it more simply Resettlement. With the most requested deviation, the so-called backstop, which concerns companies that have retraced their steps after changing their factory passports.

Giancarlo Giorgetti

summary

The list of Italian companies that have decided in recent years to bring production back home is long. They include fairly well-known brands, from Asdomar tuna, from Genoese General Conserve to Argo Tractors, one of the leading European companies in the field of agricultural machinery, and from the Colombo family company Felm, manufacturer of electric motors, to Seventy, the family business in Colombo. Fashion was founded in 1974 by Sergio Tejon. But the list does not end here. Among the heaviest repatriations are Artsana, the company behind many products for children and beyond, such as Chicco accessories and Bigili, a company with 32 years of experience in the field of emergency lighting and electronic safety systems, which has decided to concentrate its activities in Bologna.

But what causes companies to retrace their steps? To begin with, resettlement is not just an Italian phenomenon. According to calculations by the Center for Confindustria Studies, in the past 20 years, there have been 833 cases of production relocation in Europe and among the regions where production was previously transferred and resettled, Asia represented the main continent (380) followed by Europe itself (362), especially from Countries with very low labor costs, which confirms the fact that in a region like Europe, internal relocation phenomena also have a certain importance.

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Our country is also fully integrated into the new production geography of supply chains. The reasons behind choosing to reallocate production are the availability of suitable suppliers in Italy and longer than expected delivery times. Subsequently, companies moved their supplies due to increased sourcing costs abroad, actual logistics costs higher than expected, the existence of a minimum purchase quantity and coordination difficulties with subcontractors. The result is that between 2016 and 2020, 21% of a sample of 700 companies, participating in research conducted by the Confindustria Studies Center and Re4It, implemented full or partial supply subsidies. While the share of companies interviewed by the Tagliacarne-Unioncamere Study Center that announce an increase in Italian suppliers ranges between 15% and 20%. The choice to move production abroad (completely or partially) has been chosen so far by 16.5% of the companies that implemented the transfer of production abroad. In short, the phenomenon is getting worse. But on one condition: that Europe is also able to implement industrial policies that are truly capable of defending the production structure and allowing companies to fight on equal terms in the markets.