The world's leading producer of eyewear cases intends to expand its sales on the American market with products that will be almost entirely made in China. By the end of 2006 the Italian company plans to employ about 1,000 people in its new manufacturing facilities in the industrial area of Shenzhen.

The plant will start up production in the next few weeks, with around 100 employees. The new Chinese operation will more than double the company's total workforce, which currently stands at 700, including 420 in Italy and the remainder in Slovenia and Romania. Fedon chose China due to the dollar and because the very low cost of labor gives it a huge competitive advantage.Many competitors already produce there.

According to Fedon, a Chinese worker costs about 6.7 percent of a worker in the European Union, a Romanian 12.5 percent and a Slovenian 50 percent. Productivity, however, is very high in Italy, thanks to a high technological level and a highly skilled workforce. Fedon claims that for this reason its investment in China is indeed a foreign investment and not a case of moving its production offshore. Callisto Fedon, chairman of the company, insists that the Chinese facilities are an addition to its production, and in no way replace the existing production in Italy, Slovenia and Romania.

Other reasons that motivated the company's choice of China were the availability of a good supply chain, from raw materials through to semi-manufactured products, and the advantageous commercial agreements that exist between China and the USA.

Fedon closed the 3rd quarter with sales down by 1.5 percent to €42 million. The company puts this down to competition from the Far East, higher prices of raw materials and the strength of the euro against the dollar, but with profits up by 5.9 percent to €17.8 million, the company is confident that it will rapidly regain lost ground. The company is listed on the second market of the Paris Bourse, where some 15 percent of its equity is floated.