Galway firm CF Tooling opens €7m plant in China

Thu, Jul 17, 2008, 01:00

FIREWORKS AND dragon dancers were at hand in the southern Chinese production hub of Dongguan yesterday when Galway-based design and manufacturing company CF Tooling opened a new production facility to serve a major global contract with IBM.

The €7 million factory will build server racks for the China market for IBM and was built in just seven months, CF Tooling's managing director John Flaherty said.

"In December last year we picked a greenfield site here and now it's ready to run," he said. "I came here five times in all. This was a building site three weeks ago. We're planning to make 500 to 600 server racks a week here. We have capacity for 900 and we're also going to offer the facility to our other customers."

CF Tooling already has manufacturing operations in Athenry, Co Galway; the UK, the Czech Republic and the Philippines, and globally employs 1,000 people.

Turnover in 2007 was €63 million and this year is forecast to rise to €77 million. It is predicted to hit €101 million next year once revenues from the China plant come into play. Its customers include IBM, American Power Conversion, Ingersoll Rand, Linde Carrier, Toshiba, Hitachi and Glen Dimplex.

CF makes the same racks in Ireland and the Czech Republic, with the Irish operation supplying Dublin and the Czech plant supplying Hungary.

Mr Flaherty said: "IBM asked us to come to China. We made a commitment in December last year to be ready in China - in fact we made a bet, IBM said they'd buy us a dinner if we managed to do it.

"Big companies want global solutions. We couldn't be a global supplier to IBM if we just had Galway. We wouldn't be doing any business."

Vice-mayor of Qingxi Tang Quanhe and Irish ambassador Declan Kelleher officially cut the ribbon at the plant, alongside Cynthia Devine, procurement engineer and programme manager at IBM in Dublin.

The ceremony was also attended by Liam Casey, chief executive of PCH International, the Shenzhen- based supply chain management company, and executives from Glen Dimplex's Shenyang unit.

The factory is in the town of Qingxi, which is part of the huge manufacturing city of Dongguan. Exports from Qingxi were worth €3.7 billion last year and the town is home to 800 companies.

"It was no problem to set up here. People think you can get lost in China, and you can, but if you follow rules and regulations you've no problem," Mr Flaherty added. "It's like anywhere else, similar to the Philippines in fact for us.

"We will be successful here like we are anywhere else - we bring the knowledge of the Irish manufacturing process to the world, and the efficiencies that we've built in over the years."

Rising oil prices and shipping costs meant you needed to manufacture locally by region, he said.

"Plus there is the cost of inventory - no customer wants to pay for inventory. You have to manage your cost by region. Supporting your customer globally doesn't mean moving out of Europe. We're competitive within Ireland and within Europe. We do it well in that we've used transfer of technology, not jobs."