Home / Wakefield company goes to print in China
Project part-financed by the European Union
Printing is in many ways an obvious business to outsource: it is semi-automated, requires some low-cost labour skills and benefits from cheap land costs. India has long been thought of as the place to outsource such types of business, largely because of the English language skills. Indeed, some 95 per cent is done in India. But, as Wakefield-based printing company Charlesworth has discovered, China is proving an excellent base to conduct such business and more besides.
The company, which takes its name from founder Harry Charlesworth, provides electronic publishing services, such as copy editing, typesetting and project management, data capture and conversion. It also dispatches journals and books, mostly academic journals. As Neil Charlesworth explains, academic publications have a particular appeal because, typically, they have set formats of design, layout and pagination. The standardisation makes it more efficient and cost-effective to print.
Given the clear benefits of outsourcing, why choose China rather than India? The simple answer was that China could offer better rates, but on top of that Neil calculated that China might make an interesting market in its own right, especially as it was opening up. He also had a personal preference for China over India, in part to do with the cuisine.
Neil first visited China in 1999 armed with an introduction to someone in Shanghai. But it soon became clear that the business would be better based in Beijing, as the centre of government and also where the majority of the academic community is based.
Ties were established with the Beijing Foreign Investment Corporation, which remains an excellent partner to this day.
One issue that needed to be addressed early on was the structure of the venture. Neil felt that China would only be viable provided he could set up a wholly-owned operation and not, as was more common, a joint venture. Although in recent years, the authorities in China have become more willing to allow foreign companies to have wholly foreign-owned enterprises, some sectors still require foreign investment to be channelled through joint ventures. Printing is one such sector.
However, this is where the good relations that Neil had created with the Beijing Foreign Investment Corporation came into play. Charlesworth was permitted to set up a wholly foreign-owned company by referring to the business, not as publishing or printing but – completely truthfully – as a ‘software development’ company.
Charlesworth then sought to identify and appoint a general manager. This was done through the European Association of Scientific Editors, who had some 13 members in China, of whom nine replied. The final choice went to Tao Tao, who is still general manager. “We gave her US$10,000 and told her to find an office and get going,” Neil says.
Ms Tao found premises, and hired four staff. Two of them are still with Charlesworth China today, which is a tribute to her powers of recruitment, but also to the opportunities offered by the company and the terms on which they were recruited. It has certainly assisted that the company has grown fast.
The factory duly opened in 2001. It had taken two years to establish the operation. Demand continued to grow, and with that the business in China. The company says it now has the systems to move data backwards and forwards between the UK and China, involving cables stretching along the ocean beds. Growing the company, and therefore hiring more staff, has been a challenge in itself. All work is done in English and so most of the people they employ are English graduates. There is always a need for reading and quality control.
Now there are some 130 people working in China, and the China end of the Charlesworth business is bigger than the UK. Printing costs in China are half what they are in the UK and it is still cheaper to print and distribute from China than print in the UK. “The business case is absolutely compelling,” says Neil.
One of their prize contracts is the contract to typeset Nature magazine on behalf of the Nature Publishing Group.
Growth has not just come from typesetting and printing; the real growth area has been in ‘rights’ management. This involves selling academic journals to Chinese libraries, and advising Western publishers, particularly scientific, technical and medical publishers, on how to sell content to China. One of the biggest customers in China now is the national buying body for university libraries.
This is a potentially big area of business, helping publishers develop new markets for their publications, and at the same time offering benefits to China from Western academic knowledge that they might not otherwise be able to access.
Charlesworth is also working with UK firms which are extending their activities in China, by providing translation, typesetting, printing and distribution of promotional and marketing materials.
Growing the company is a problem; there are constant challenges. “We have to address inefficiencies all the time in such a tightly priced business as ours,” says Neil. One cost-cutting exercise involves finding cheaper premises, at least for part of the operation, outside of Beijing and nearer to Tianjin.
Neil has greater ambitions still for the business. Having established the printing facility, he believes he should be able to target publishers in other disciplines and forms, not just academic publishers. Then, he could arrange for academic books to be translated into Chinese and distributed to a Chinese readership. “We are following the demand,” he says. “Originally, the idea was to hold the business steady, but now between two-thirds and three-quarters of our business comes from overseas, and we would not have anticipated that depth of our work - particularly from the United States.”
It has been exhausting, but rewarding, he concludes. “China is all fun: never a day goes by without something strange happening.”
As told by Neil Charlesworth to Humphrey Keenlyside. Courtesy of the China-Britain Business Council: www.cbbc.org
