20 March 2006
Profitable Packaging(HKTDC Packaging, Vol 01,2006)
Rich City Packaging Ltd
|Rich City Packaging Ltd offers a complete range of metal and plastic boxes and wood display panels|
Rich City Packaging Ltd proves that diversification can reap rich rewards, especially if a company pays attention to its reputation. The 20-year-old firm is an experienced manufacturer of metal and plastic cases, bags, pouches, paper gift boxes and other packaging products. The company also manufactures and sells display units for use in the retailing of jewellery, watches, spectacles, pens, cosmetics and gold coins.
"We started in the 1980s," says senior marketing executive Becky But. "Our first products were simple plastic boxes. Later, we started using a variety of other materials including metal. Eventually, we decided that metal boxes seemed not only best for the market but also suitable as a major platform for our future development. Today, we make metal boxes in all sizes and shapes using coverings that include velour, velvet, vinyl, bengaline and pigpell."
Production of these boxes takes place at Rich City's 20,000-square-metre, 1,400-worker factory in Dongguan on the Chinese mainland. Principal markets are the US, Europe, Hong Kong and various places in Asia, including Taiwan, Japan and Singapore.
"We were very fortunate to have a relatively free run at the market as competition was slight when we started out. We also gained invaluable experience over the years, and we were well able to ward off competitors at both the top-end and at the volume production end of the boxes and packaging industry," But asserts.
"While metal and plastic boxes remain our core business lines, we also diversified into other products, such as wood-frame mounts for displays. These are often wrapped in vinyl, velour and pigpell, as wood can be shaped in a fitting form to display jewellery. We also do display-type optical cases and watch boxes."
But says metal boxes are manufactured on a large scale requiring volume orders to ensure low prices yet maintain workable profit margins. "However, our wooden boxes and watch boxes are usually considered to be high-end items," she adds.
"We produce all the moulds and tooling required in production as that enables us to maintain control of the whole process and keep costs down," But explains. "We have 50 technicians dedicated to the design and manufacture of moulds and tools."
But also says the management continually tries to improve operations in terms of assembly, bringing about more efficiency and ensuring tight quality control.
"Today, our major competitors are companies based on the mainland," But reveals. "However, with the exception of Thailand there is little overseas competition. The packaging industry demands skilled labour and the work is also labour intensive, so outside of Asia it is hard to compete at present-day prices."
Despite the rosy picture and increased demand, But says the cost of raw materials is hitting profits. "More recently, the revaluation of the renminbi has also hurt profit margins."
According to But, Rich City enjoys doing business with a host of regular clients. "Such stability is important and we do as much as we can to maintain good relationships," she claims. "However, this year we will try to penetrate further into the European market with more high-end products likes display panels and watch boxes."
But says Rich City is also preparing a new catalogue and keeping its website up to date. "Also, our factory was ISO 9001-certified in 2005, and we believe that will give customers even more confidence in us and the quality of our boxes."
She says that Rich City is committed to maintaining high quality as a key element in its determination to remain both an industry leader and innovator. "In order to stay successful, we continually invest substantial capital in plant and machinery and the training of the workforce to improve production processes and finished items."
Rich City certainly seems well-packaged to continue thriving in the years to come.
WRITTEN BY TONY HENDERSON
Rich City Packaging Ltd