Could Tonfang's Possible Jamaican Entry Spur The Development Of The Assembly Industry?

In my blog post entitled  JUTC Testing  Chinese Made Bus In The Hills Of St Andrew; Is Automotive Assembly On The Horizon?, I spoke about the possibility of having Chinese automotive assembly lines in Jamaica.

However, the assembly of consumer electronics and electrical equipment seem probable. This, as Tsinghua Tongfang Company, is seeking to raise US $60 million on the Jamaica stock exchange (JSE) to aid with the build out of the assembly plant. Tongfang envisage, all things being equal, that they'll have their Jamaican plant up and running by September of this year.

Electronics assembly line in China. Source of image: TechCrunch

The aforementioned Jamaican assembly plant would operate under the moniker, Tongfang Global (Ja) company limited, with the aim of earning US $300 million in exports. Tongfang evinced that the importation of various components would be necessary, with the aim of assembling televisions and kitchen appliances under the Seiki brand.

Tsinghua Tongfang Company

Tongfang was founded in 1997, it focuses on the manufacturing of consumer electronics, information appliances, energy equipment, etc. Tongfang's Seiki branded products are relatively popular, especially their digital televisions.

Information sourced from Tongfang's website, suggests they able to produce Televisions ranging from 19"-80", with average of 10 million units being produced. The units are available in approximately 20 countries. Tongfang is seeking to export televisions to the US, Europe and south America, when/if their Jamaican assembly plant comes to fruition.

Tongfang's Possible Entry Has The Potential To Stimulate Jamaica's Nascent Assembly Industry

Jamaica once had a vibrant garment assembly industry, however, due high labour and energy costs, most of these companies relocated to Asia. The garment industry predominated much of Jamaica's assembly industry between the 80s and early 90s.

However, in recent times, goods assembly has languishing, except for Von's motor and company's motorcycle production. Von's assemblies motorcycles under a joint venture between Loncin group out of China, operations began in 2004. An investment by Tongfang would provide the fillip to boost the assembly and overall manufacturing industry.

Using available data on financial times' website, Tongfang has total assets in excess of US $7 billion, suggesting that they're more than capable of implementing this venture. Additionally, Tongfang supplies major retailers in the US; notably, Target and Walmart.

Tongfang entry into Jamaica is not yet certain, as Tongfang is seeking to raise US $60 million on the JSE, in addition to the demand of government concession/s. Will the government provide the concession/s being sought? Time shall tell all.

Thanks for stopping by!

References  

About Tongfang Global, Tongfang Global.http://www.tongfang-global.com/thtf.asp

Von's Starts Bike Production, Jamaica Gleaner.http://old.jamaica-gleaner.com/gleaner/20041117/business/business5.html

Tsinghua Tongfang Global Company LTD, Financial Times. http://markets.ft.com/research/Markets/Tearsheets/Financials?s=600100:SHH&subview=BalanceSheet

Tongfang seeks location for Jamaican assembly plant -- wants to raise US 60 million on JSE, Jamaica Observer.http://www.jamaicaobserver.com/business/Tongfang-seeks-location-for-Jamaican-assembly--plant--wants-to-raise-US-60m-on-JSE_18756969

JUTC Testing Chinese Made Bus In The Hills of St Andrew; Is Automotive Assembly On The Horizon?

News came mid-week, of a pilot project to test Chinese buses on hill routes of St Andrew. The Golden Dragon made buses are variant to Jamaica urban transit company's (JUTC's) main fleet, that includes the Swedish made Volvo buses and Belgian made VDL Jonckheere buses. The Golden Dragon buses are said to be smaller to their main counterparts, with 39 seats, as was stated in a Jamaica Observer article entitled JUTC testing Chinese-made smaller bus for hill routes.

Golden Dragon buses, not unlike the one being tested by the JUTC. Source of image: Hotel Shodlik Palace

The aforementioned bus shall undergo an eight week pilot on JUTC's number 53 route, stopping at above rocks in St Andrew. The pilot seeks to determine the suitability of the Chinese made bus on St Andrew's challenging hill terrain. Successful completion of the pilot should see these buses being deployed on routes 53, 54, 97 and 61. Possibly beckoning the start of a rural bus system.

Fear Of Chinese Products And Golden Dragon Buses

The words "Made In China" often begets reponses such as inferior, no good, spurious/counterfeit, etc. Though not completely false, these responses should not be taken in totality, as numerous good to high quality products are made in China. Especially true in the manufacturing of consumer electronics; top manufacturers include Lenovo, TCL Corporation, Huawei, ZTE and the rapidly growing Xiaomi.

Additionally, progress has been made to popularize Chinese brands in the auto industry. However, the Chinese automotive industry is dominated by European and east Asian manufacturers. a Bloomberg article entitled How China Protects Its Auto Industry, suggests that Chinese brands account for 34.5 per cent passenger cars.

This leads us to the Chinese bus being tested by the JUTC, made by Xiamen Golden Dragon Bus Co., Ltd. The firm was established in 1992, employing 4000 individuals and has an output of 40 000 buses annually. Subsequent to the announcement made by the JUTC of the possibility of the Golden Dragon buses being added to their fleet, Jamaicans sounded the alarm bells, questioning their build quality.

However, the buses are built to ISO 9001:2000 standards. Golden Dragon's website suggests that their buses are also sold in 80 countries. This may come as a surprise to many Jamaicans, Golden Dragon's parent is the more popular KingLong. Kinglong made buses are included in Knutsford Express's fleet. I should also add that the bus is using an American made engine. :)

Is Automotive Assembly On The Horizon?

Von's motor and company, local distributors of Golden Dragon buses, are known to assemble bikes in Jamaica. In fact, the venture commenced operations in 2004, assembling bikes made by Loncin Group. This may bode well for more large scale assembly, especially with the Chinese showing great interest in Jamaica. Additionally, with the recent tabling of a special economic zone act in parliament, auto assembly should become more attractive.

Thanks for stopping by

References

200 more buses for the JUTC, JIS.
http://jis.gov.jm/200-more-buses-for-the-jutc/

Finance Ministry Waffles On Incentives For SEZ, Jamaica Gleaner.
http://jamaica-gleaner.com/gleaner/20150116/business/business1.html

Von's Starts Bike Production, Jamaica Gleaner.http://old.jamaica-gleaner.com/gleaner/20041117/business/business5.html

About Us, Golden Dragon.
http://www.goldendragonbus.net/company-info.html