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Issue link: http://digital.canadawide.com/i/526329
bcbusiness.ca factories in China. Demand for China's cheap labour has created a manufactur- ing base with expertise and infrastruc- ture that no country can rival. Yet China's success has driven up its labour costs and fuelled the rise of competitors. The advantages of getting stuff made in China aren't always as clear as they once were. For Arc'teryx—which also has con- tracts with factories in Taiwan, Vietnam, Bangladesh, El Salvador and Myanmar— the rationale for manufacturing in China is simple: highly skilled labour that's affordable. And despite rising labour costs in China compared to some com- petitors, it remains an advantageous loca- tion because of its ingrained expertise and logistical infrastructure that emerging manufacturing coun- tries are still trying to figure out. Arc'teryx often institutes new manufacturing processes when working with materials and designs that require a high degree of precision. The company needs a workforce that is both highly skilled and adaptable—and Chinese firms have expertise in train- ing their workers to meet the demands of discerning Western firms. Emerging countries may have sufficient technical capabilities to produce simpler items like T-shirts and shorts but not to make more demanding items like insulated or water- resistant jackets. "These other countries don't have as much of a history in apparel manufac- turing, and therefore they don't have the whole culture around that, or the skill level," explains Arc'teryx's vice-presi- dent of operations, Lance Richardson. "So it takes time to build that up in order to make sure that you get the right quality you want with your partners. And being in more emerging economies, you also have to be more cautious and more vigilant on CSR (Corporate Social Responsibility), which is a key component." That said, the company's need to protect its manufacturing secrets from other firms has meant that it maintains manufacturing facilities close to head office. (Chinese firms have long been accused by foreign companies of steal- ing their ideas and technology, and the country's courts are viewed by outsiders as opaque, corrupt and biased toward local companies.) Arc'teryx has two fac- tories in Burnaby and is planning to dou- ble or even triple its local manufacturing capabilities within the next two years. "If we've got a product that needs absolute IP protection, we'll do it within our own facility," Richardson says. "We've had IP protection on our climb- ing harnesses. At times, we've had IP protection on some of our apparel and some of our backpacks. And so we want to protect that IP absolutely." As well, for products like climbing harnesses, main- taining quality is literally a life-or-death matter. "Harnesses absolutely must not fail and so we keep that production in-house." Keeping manufacturing facilities close at hand also allows Arc'teryx to innovate more quickly. It can come up with new products at its North Vancouver design centre and quickly make adjustments to machinery and processes on the nearby Burnaby factory floor. "One of the advan- tages here is we're 10 minutes away from our facility," Richardson says. "If we have a problem, we drive there. It is not a 13-hour flight. It's not a workweek away or two weeks away from home." • bcbusiness.ca July 2015 BCBusiness 157 the company's need to protect its manufacturing secrets from other firms has meant that it main- tains manufacturing facili- ties close to head office. arc'teryx has two factories in burnaby and is planning to double or even triple its local manufacturing capabilities within the next two years ★ ★ ★ ★ ★ ★ ★ Doing Business in C h i n a LIFE OR DEATH Arc'teryx manufactures critical products, like harnesses, in Burnaby