adidas closes its factory in China; move to Myanmar

Hong Kong’s Singtao Daily reports today, “World sports clothing leader adidas confirms that it has decided to close the only factory directly under it in China and may move it to Myanmar. The company explains that the closure is its strategy to rearrange its resources all over the world. However, analysts guess that as wages gradually rise in China, adidas hopes to move to Southeast Asia where labor costs are lower.

“The factory to be closed is adidas’ wholly owned subsidiary located at Suzhou Industrial Park. As for the future destination of the factory, the company’s Chinese headquarters has not given any detailed explanation. Chinese media cites sources in the Park that adidas plans to move the factory to Myanmar. Chinese workers and staff will be dismissed on the spot, but the company will provide preferential separation compensation.”

Singtao says, “In spite of sharp rise in its sales in China, adidas plans to close its only directly controlled factory in China. This provides much food for thoughts. Though the company stresses that the closure of its factory in Suzhou has nothing to do with wage increase or stock in its warehouse, analysts guess that the major cause is the rise in wage costs in China.

“Before adidas’ withdrawal, world footgear leaders such as Clarks and K-Swiss increased their production lines in Vietnam and Indonesia one after another.



Categories: Manufacturing & Industry

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Trackbacks

  1. China’s rising pay decreases production competiveness « China Daily Mail
  2. Myanmar’s Kachin refugees forced back by China « China Daily Mail
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