MASCOT is opening a factory with 650 employees in Vietnam
7. March 2008
The inauguration of the workwear manufacturer MASCOT’s new factory in Vietnam strengthens the company’s basis for retaining the growth rates of around 20 per cent annually seen in the last ten years. The factory is located 50 kilometres from Hanoi and will employ 650 people when it is fully operational.
»We have been active in the Far East for about a decade, so now we have gone the whole length and combined several connected activities in an industrial zone near Hanoi«, says Michael Grosbøl, Managing Director of the 25-year-old family-owned international company with headquarters in Silkeborg. The start-up of the Vietnamese factory will bring MASCOT’s raw material store, specialist production and quilt factory together, so that the company is close to the production facilities and becomes more competitive. This will enable MASCOT to deliver to the customers more quickly.
Sales, stock of finished goods and all administrative functions remain in Denmark. The standard production collaboration with other workrooms in Far Eastern countries will also remain intact. Michael Grosbøl continues: »It is completely new for us to have our own production out there. However, another reason for locating ourselves in Vietnam is that we are very focused on improving our products and the lower wages enable us to undertake product development without significantly increasing costs«.
Product development very important
Especially product development, but also market development, has been characteristic of the workwear manufacturer’s overall strategy. »We have been involved in product development ever since I started at the company in 1992 and in those days it was innovative, for very little had happened in the workwear industry for half a generation – there had been virtually no development«, explains Michael Grosbøl. He continues: »Especially from the late 1990s, we really speeded up the product development and that has turned out to be profitable«. Over a decade, the company’s product development has resulted in stable, two-figure growth rates of around 20 per cent, which has created volume.
Economies of scale benefit the customers
Both product development and volume growth have developed as prerequisites of each other. Michael Grosbøl explains: »Our current size allows us to exploits economies of scale and do well out of it. A small company cannot undertake product development at this level. It is impossible because everything has to be in stock. Currently, we have approx. two million workwear products in stock, which we can deliver overnight, and such a stock obviously presupposes considerable volume«.
The inauguration of MASCOT’s 15,000 m2 factory in Vietnam will allow the company to sustain both product development and growth creation. Michael Grosbøl explains: »We will employ 650 people in Vietnam, with 600 handling production, 25 stock and 25 administration. If we wish, we have the option of moving to phase two with up to 1,700 employees. The site is big enough for that, for a total of 50,000 m2 provides plenty of scope«.
Long research process beforehand
The inauguration of the factory has been preceded by 30 months of preparations, when the business climate in four different countries was assessed. The actual construction has taken less than a year since Minister for Development Ulla Tørnæs in late April last year turned the first sod with Michael Grosbøl.
»Considering the scale of the project, I think that is very reasonable. We bought the site in an industrial zone and that has been to our advantage. With the support of the industrial zone, all the practicalities have been handled very professionally, and with the support of the embassy we have avoided potential problems in a very sensible way. I am incredibly proud to say that everything has been done according to the book«, Michael Grosbøl concludes.
Tip-top building safety
Throughout the construction phase, MASCOT focused on safety. No employee was allowed to start working on the construction before passing a safety course. Yesterday, this was highlighted by Denmark’s Ambassador to Vietnam, Peter Lysholt Hansen, in his inauguration speech. He said: »I know the project has involved more than half a million hours of work without any industrial accidents. It is important to create good working conditions and a safe workplace for the employees. MASCOT has achieved that«.