Monday, February 1, 2016

Role reversal? China’s F-Pacific expands manufacturing, headquarters in Vancouver

Role reversal? China’s F-Pacific 

expands manufacturing, 

headquarters in Vancouver

From left, Minister of State for Seniors Alice Wong, China Fiber Optic Network System Group chairman Zhao Bing, China's consul general in Vancouver Liu Fei and F-Pacific CEO Bei Nie | Photo: Tyler Orton
It’s not uncommon for a North American company to export its manufacturing to China.
But what about a Chinese company exporting its manufacturing to North America — and in Vancouver of all places?
China’s F-Pacific Optical Communications announced Friday (May 1) it’s opening a new regional headquarters in downtown Vancouver and opening a manufacturing facility in Surrey, where it plans to hire 200 people.
F-Pacific, which is a subsidiary of China Fiber Optic Network System Group (CFONSG), also opened a facility in Richmond last year that produces zirconia ferrule blanks. Although the ferrule blanks are produced in B.C., they are shipped back to China to be installed in the company’s fibre optic cables for faster Internet speeds.
But F-Pacific CEO Bei Nie, who is leading the North America operations, said through a translator the company will eventually partner with Canadian telecom firms to install the ferrule blanks in fibre optic systems in the domestic market.
She estimated its sales revenue would reach $100 million by the end of 2015 while exports from Canada to China should amount to $10 million.
“This will (serve) as a bridge for Canada-China trade,” Bei’s translator told reporters in Vancouver.
Despite Canada’s higher labour costs, F-Pacific said it set up a 23-person manufacturing operation in Richmond last year due to cheaper electricity, air quality more suitable for manufacturing ferrule blanks and stronger intellectual property (IP) legislation.
CFONSG chairman Zao Bing, who appeared at the announcement, said through a translator the IP protection was needed to stop other businesses from copying the technology since F-Pacific is the only company in North America capable of producing the ferrule blanks.
Political tension between China and Japan also played a part in expanding the production operations in North America.
The raw materials needed to produce the ferrule blanks come from Japan. Canada enjoys a more stable relationship with both Japan and China than the historic rivals share with each other, meaning shipments of the raw materials are unlikely to be interrupted.
Liu Fei, China’s consul general in Vancouver, said companies from China often look to the U.S. to open North American headquarters but the B.C. government made a strong business case for F-Pacific to set up on the West Coast.
“I’d like to see more Chinese companies coming here and I’m going to support this effort,” she told reporters.
HQ Vancouver — a joint initiative between Ottawa, Victoria and the Business Council of B.C. (BCBC) aimed at luring Asian companies to Vancouver — worked with CFONSG to bring F-Pacific’s new regional office to the West Coast.
This marks the first time since HQ Vancouver’s creation in February that the organization has drawn a company from Asia to Vancouver.
Conservative MP for Richmond Alice Wong, Minister of State for Seniors, said at the announcement that F-Pacific’s decision to move to Vancouver reflects the strengths of the HQ Vancouver initiative.
Over the next three years, Victoria is contributing $3.4 million to HQ Vancouver, while Ottawa is contributing $1.9 million and the BCBC is providing $1.2 million in funding and in-kind support.