REDDITCH, UK – Bicycle and car parts retailer Halfords UK found a new sourcing base in Cambodia. Due to rising labour costs and the prolonged EU anti-dumping duties the British Halfords Group started to look for a new production location that could replace China.
“We are always looking for new suppliers across the globe offering better value in order to maintain our competitive position”, said Halfords UK’s CEO David Wild in an interview last month. “Cambodia emerged as a suited supplier for bicycles. We believe it offers a real alternative to the Chinese option. The South East Asian country could be the first step of moving production as we are also exploring opportunities in other nations in this region.”
Halfords decided to move their bicycle production to Cambodia after an initial contact at one of the trade shows. Wild continues: “We met someone who was producing in Taiwan but found it increasingly expensive. Therefore he was thinking of opening a factory in Cambodia.
“Cambodia offered cheap labor costs and duty rates, so we provided him some technical help to build that factory. We started buying bikes two years ago, in relatively small volumes at first but it has got bigger over time. It’s an example of finding the right partner, supporting them with our technical help and moving to a significant level of production.”
Halfords does not intent to leave China at all. Traditionally southeast China was an important production location for Halfords. Due to the importance of this area, Halfords has been running its own office in Hong Kong for many years. Recently they opened up an office in Shanghai, “in order to look at the whole of China and see there are areas that offer lower production costs”, said David Wild.