China Still Important Manufacturing Base for Shimano
OSAKA, Japan – Last week Bike Europe reported “Shimano Downgrades Importance of China as Production Base.” This report was based on a statement made by the listed company in a recent trading update. It said that Shimano Inc. expects to generate extraordinary income this year with the return of land belonging to one of its Chinese plants. On that Bike Europe concluded that, due to EU’s anti-dumping measures as well as the Trump Tariffs, Shimano reduced the importance of China as manufacturing base. This assumption is not correct, claims Shimano.
Shimano’s statement in its financial overview of the results achieved during the first nine months of the year, said “The full-year forecasted consolidated business performance will be changed as follows due to the recognition of non-operating income during the first nine months of fiscal year 2019 as a result of depreciation in Asian currencies, and the posting of extraordinary income associated with the return of public land at China Plant.”
Returning ownership of land
That Shimano is returning ownership of the land in China, is correct. However, this has nothing to do with a supposed shrinking of Shimano’s operations in the People’s Republic. According to Shimano Inc HQ in Osaka, Japan in response to last week’s Bike Europe report, the returning of the land is caused by the fact that Shimano constructed a new production facility in Kunshan.
Shimano’s official response to report
The statement issued by Shimano’s HQ says “To Shimano, China is still a very important manufacturing base. However, due to the request from the Chinese government to vacate the property where the old factory stood, we have relocated and constructed a new factory.
“Currently, we are relocated at a new property, still within Kunshan City, with an area larger than the that of the old factory and have been in full operation since 2017.”