Tuesday 15 September 2009

Hurbank plc


Celton has a population of 7000 and an unemployment rate of 11 %. It isn't a high rate ,but when hurbank plc moved to China, that rate would be gone up so much because they have 3 factories in there.Nowadays, there are many companies want to move their factories to China or another developed countries because they have cheap worker price and cheap materials.That is making a difficult problem to developing countries. There are a lots workers lost their jobs and reduce those countries's GDP.
80% of all emplyees is a good rate because it made them control easily.They had high pay of factory floor staff :18000£ pa.3% of labour turnover pa is a low rate. The money which they paid for worker when they closed their factories is too low. There was only 35000£ total. It was almost 2 people pa.
The rate of unemployment in the region of the new factory in china is 14%.It is a low rate in a country has over 1 billion people. The money which they pay for new labour is lower than Cellton's labours 9 times.The costs to relocate and set up is £22 million and net present value of investment is £ 5.7 million, that is a big money.They had to prepare if they wouldn't want to have a problem with their cashflow.
Their sales revenue and net profit was increased with a big number. I think they shouldn't change their factories's location.If they want to have more profit, they can cut some group of products which have low profit and increase produce their strong products.For example they can can cut theit shirt production because It have low sales revenue and high fixed costs: £15000000.
We can see when they moved to China their variable cost is decreased and fixed costs is decreased as well.It makes break -even lower .The negative thing is they must pay more costs in delivery....haiz....

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