Profine’s China strategy minimizes risk of IP theft

Oakville, Ont.-based Profine Molds Inc. says it has found a way to gain benefits from the cheaper operating and labour costs in China, while minimizing the risk of intellectual property (IP) theft.

But Wayne Stoddard, marketing manager at Profine said the move to China wasn’t a choice — it was a must for the company to stay competitive.

“We needed an improved price point on molds that were not IP-heavy,” he said. “Otherwise, Profine could have risked losing its North American clients to companies that could provide molds at a cheaper cost,” he added.

Last summer, Profine started manufacturing molds at a facility in Kowloon, Hong Kong, but kept the manufacturing of its IP-heavy molds in-house at its Oakville facility.

“There is a difference between producing a cap and a highly engineered automotive part,” Stoddard explained. This strategy also allows Profine to ensure its customers that mass quantities of their highly engineered applications won’t suddenly arrive at a port in Vancouver.

Enforcement of IP is improving in China, he added, because its leaders now realize that’s what it is taking to attract good quality companies and products into the country.

Additionally, Profine sees opportunities in China’s domestic market. The cost of living continues to rise in China, and citizens increasingly have more money to spend and are demanding higher quality, more fully featured products, Stoddard said.

Profine’s Kownloon facility wasn’t built from the ground up; instead the company chose to partner with existing Chinese moldmakers rather than start up operations on its own. But it’s not outsourcing. Stoddard said all of Profine’s overseas workers have or will receive training from Profine in Oakville.

Plus, Profine conducted thorough checks of its Chinese partners to ensure their reliability and used resources from both Export Development Canada (EDC) and the Chinese consulate in Canada to find these partners.

But Profine’s global strategy isn’t limited to China. It recently opened a new 7,500 square foot (sq. ft.) facility in Brazil to support the South American market. Stoddard said the possibility exists in the future for Profine to move some low-risk production for the North American customers to that location, but for now the company is sticking with its original mandate.

But Profine isn’t ignoring the North American market. Investments in new technology like new machinery for CNC and EDM machining, polishing, grinding, and software for developing molds in 3D are all part of Profine’s strategy to stand out amongst its competitors, Stoddard said.

“If you don’t invest in technology you can’t compete in the North American market – you just can’t,” Stoddard said Additionally, Profine expanded and improved its research & development (R&D) capabilities when it moved into its new 60,000 sq. ft. facility last August.

Its prior 5,000 R&D centre was located in a separate building, isolated from the company’s production facility and its head office. Plus, it wasn’t conducive to conducting presentations and tours for customers, Stoddard said.

The new 10,000 sq. ft. R&D centre is designed to be a showcase facility and is replete with separate office space, meeting and presentation rooms. It’s adjacent to the manufacturing operation, and includes test equipment for 33- to 350-ton capacity and includes plug-and-play space for S3 turnkey projects where Profine can manage and test all aspects of the job, Stoddard said. This includes the role of auxiliary equipment, hydro and water usage and the amount of space customers have to allocate to that job.

The goal is to become a one-stop-shop for molders and OEMs from mold design through testing, and stay one step ahead of the competitors with new innovations and top-notch service.

“You have to guard your IP vigorously — that’s the differentiator,” Stoddard said.