As Chinese manufacturers struggle due to COVID-19, local businesses pick up slack

February 25, 2020

From auto plants to hockey stick factories, China’s manufacturing has been gutted due to the spread of COVID-19 and that has sent Canadian companies scrambling to fulfil orders by shopping local.

“China is known as the world’s factory,” said Jennifer Ger, co-founder of Foxy Originals, a company that makes custom jewelry and accessories.

“People are looking for domestic options now and we’re getting a flood of inquiries.”

The Toronto-based firm has been experiencing a boom in custom orders. Ger says her company is seeing “an 80 per cent increase in quote requests over this time last year,” and is “forecasting a 50 per cent increase in business over last year” for the first quarter.

“I’ve got a client in New York whose customer is a major soft drink brand that has a launch in Italy and they are in need of [enamel] pins and they don’t have time to wait,” Ger told CBC Toronto as she went through her growing list of new clients.

“There’s a charity that’s doing a fundraiser for autism in the U.S. and their necklace supplier fell through.”

A worker adds paint to a Canadian maple leaf emblem for a Foxy Originals client. (Talia Ricci/CBC)

Unfortunately, she says, she’s even had to turn down potential clients, like a large American cosmetics brand that needed an immediate order of 5,000 key chains.

“There’s some that are too rushed. Like, they need it next week.”

Factories closed as a precaution

As the virus spread, affecting tens of thousands of people in the country and beyond, Chinese factories started to close in an effort to contain it.

Some of the plants that have re-opened in the last week as the Chinese government tries to stabilize the economy, still aren’t operating at full capacity.

Foxy Originals is a Toronto-based maker of jewelry and accessories. (Talia Ricci/CBC News)

“I’m definitely seeing more interest in local manufacturing,” said Kathy Cheng, president of GTA clothing company Redwood Classics.

Cheng says while the situation in China is unfortunate, local companies are getting an unexpected chance to compete and that’s a welcome opportunity.

Kathy Cheng, president of Redwood Classics Apparel, says she’s always put in the effort to promote making products domestically. She say she has also seen a spike in business over the last couple of months. (Talia Ricci/CBC)

“For us an an apparel manufacturer, it’s not just cutting, sewing and putting the products together, a lot of the accessories and trim get affected as well when there’s a halt in manufacturing.”

And therein lies the chance for companies like hers to show buyers why they should be choosing local.

“The textile industry has really dissipated over all these years because everybody has gone offshore,” she said.

“Just being made in Canada itself, there’s an inherent quality because of the level of governance we have to adhere to,” said Cheng, referring to Canada’s labour and quality standards, which are more strict than China’s.

“It can be a wake-up call for people to start investing locally.”

CBC