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Adidas to Shut Down the Only Factory in China Later this Year: Media

07-18 17:28 Caijing
The factory, which is located in Suzhou Industrial Park, "will be closed later this year" due to considerations of "integrating its global resources"

Adidas has decided to shut down the only factory in China which is directly under its control, Netease reported, in an apparent move to shift its production lines into southern Asia.

The factory, which is located in Suzhou Industrial Park, "will be closed later this year" due to considerations of "integrating its global resources", the company said in an email responding to an inquiry from Netease.

The company didn't specify whether it would relocate the factory, and where if it would, but according to an unnamed source close to the matter, quoted by Netease, the next location will be Myanmar where labor costs are much lower than in China.

The first news emerged as early as in 2008, when Herbert Hainer, Adidas chief executive, told reporters in Germany that the company would partly retreat from China before labor costs in the country became too expensive.

According to rumors carried online since April, the factory may be closed in October this year.

China has become Adidas' second-largest market, and is on track to overtake the United States as sales in the country has risen sharply in recent years.

Nike, one of Adidas' major competitors, closed its Chinese shoe-making factory in Taicang, a city also in Suzhou, south China's Jiangsu Province in March 2009. As much as 1,400 Chinese workers were dismissed, who launched mass strikes after failing to reach agreements with the company in compensation package.

 

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