Asian Manufacturers Continue to be Preferred

The Economist Intelligence Unit has released a report on North American supply chains. In this report the advantages and disadvantages of production in various countries in Asia are compared with those of the US, Canada and Mexico. It finds that companies are seeking to diversify their production. But, Asian manufacturers will continue to be preferred in the medium term. This is because of their competitiveness as low-cost production hubs. 

An additional observation is that foreign direct investment countries that offer low-cost alternatives to China is expected to grow. These countries include Indonesia and Vietnam. The report finishes by noting that Asia’s share of global exports is forecasted to increase two percentage points to 38% by 2025. 

Our experience at Porticos Asia mirrors this report’s conclusion. We have found that North American companies in particular are keen to seek alternative countries for the supply of parts and products. However, although they are seeking to diversity, Asian manufacturers continue to be an integral part of their plans. 

Our customers are primarily in the medical and telecommunications fields. Several of them have opted for suppliers in Indonesia as alternatives. In particular, the industrial region of Batam in Indonesia offers a compelling combination of high-quality production combined with cost competitiveness. Furthermore, Batam’s proximity to Singapore makes it a convenient location to visit. It is just a 60-minute boat ride away.

Customers that have recently opted to transfer production to this region include a Fortune 500 company and world leader in secure telecommunication equipment, an established medical company producing remote cardiac monitoring equipment and a medical start-up producing test kits. 

At Porticos Asia we provide manufacturing services for companies in a number of fields. Together with our partner, the engineering consultancy Porticos US, we can provide a one-stop solution, from design to production. For more information click here.