Rising wages push firm to Dhaka

PUBLISHED : Friday, 13 April, 2012, 12:00am
UPDATED : Friday, 13 April, 2012, 12:00am

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Tired of shouldering the relatively higher wage burden of hiring migrant workers at its Shenzhen factory, one of the world's largest cap makers is heading to low-cost Bangladesh.

Pauline Ngan Po-ling, deputy chairwoman of Mainland Headwear, said fast-rising salaries and labour shortages made it increasingly hard to attract workers to replace those who leave.

The firm is among the many labour-intensive manufacturers on the mainland who are grappling with the emerging problem of finding workers. That's because a new generation of migrant workers, with higher life expectations, are shunning blue-collar jobs.

Ngan said Mainland Headwear would let its Shenzhen workforce shrink further through natural attrition. About 760 migrant workers left the factory last year and were not replaced, she said.

The firm currently has 2,700 workers and the number is expected to fall in the coming months, according to Ngan.

'We made an offer of 2,300 yuan (HK$2,820) a month for unskilled sewing workers,' she said. 'Take it or leave it. I have had enough of the hassles in hiring migrant workers.'

In Bangladesh, the pay for such workers was US$60 a month, she said.

Ngan is among tens of thousands of Hong Kong factory bosses across the border who are wrestling with the high turnover rate of migrant workers, rising wages, more costly raw materials, a policy-driven industrial upgrade, and weaker export demand. Many migrant workers have been leaving the Pearl River Delta to return to their hometowns, where urbanisation has created more job opportunities.

Their aspirations have also changed, rendering the factory floor an unattractive career option, analysts say.

Mainland Headwear, which started in Shenzhen 26 years ago, began to relocate parts of its operation to Bangladesh's capital Dhaka a few months ago. It plans to shift half of its manufacturing capacity to Bangladesh in two years.

Ngan said her Shenzhen factory would remain, but it would handle production of higher-margin caps for customers such as New Era from the United States, the world's largest cap retailer.