Sept 2 - It's been making model trains for 70 years, in recent years with the help of Asian manufacturers, but now Hornby has joined the growing ranks of UK firms bringing production back to Britain. Michael Millar reports
For over 70 years model maker Hornby has been a household name in the UK. The manufacturer of model trains, planes and automobiles is quintessentially British. But like many firms, Hornby has out-sourced production far from the UK to low-cost locations like India and China. But like an increasing number of UK companies, Hornby has started bringing manufacturing back from Asia, starting with a range of paints and a new line of model aircraft. This phenomenon is known as 're-shoring', back-shoring and even on-shoring. Hornby Chairman Roger Canham explains why his firm has turned from West to East - and back again. SOUNDBITE (English) ROGER CANHAM, CHAIRMAN, HORNBY, SAYING: "Abroad, with the labour rates rising and labour becoming more scarce, then inevitably the cost of our products from a manufacturing perspective have risen. It's not just about the manufacturing cost. I think control of production process, in terms of quality assurance, but also speed to market, and the ability to talk to people within your own timezone and people you can relate to quickly and easily." SOUNDBITE (English) REUTERS REPORTER, MICHAEL MILLAR, SAYING: "While companies aren't exactly racing to bring their production back from their traditional low cost manufacturing bases, a number of high profile, big companies have done just that in the recent past." These manufacturers range from high street retailer Topshop to prestige automaker Aston Martin. And this two-way traffic looks set to increase. According to a recent poll of UK firms, 32% of UK manufacturers expect to buy more British made components, 41% said the UK is becoming more attractive as a manufacturing destination compared to abroad, while escalating costs were the chief reason for the move, cited by 59% of respondents. But here at EEF, the body which represents British manufacturers, they say cost benefits are far from being the only thing driving so-called 're-shoring'. SOUNDBITE (English) LEE HOPLEY, CHIEF ECONOMIST, EEF, SAYING: "I think there is a number of reasons they have chosen to take this action. Firstly, quality concerns. Companies were getting shipments of components and goods from thousands of miles away and they weren't quite meeting the needs of their customers. I think secondly there are issues of flexibility - it's really important for manufacturers that are competing on the basis of their ability to add value to their customers, deliver what their customers need and when they need it, to have that good management over the entire supply chain." Although UK manufactures are showing increased enthusiasm for going back to their roots, the majority of manufacturing continues to go from West to East and not vice versa. It's unlikely - particularly as UK businesses look to exploit Eastern markets - that the out-sourcing phenomenon will ever come full circle.