Brother companies have significantly reduced staff and orders are flowing to Indonesia, a sad farewell! Old Shenzhen Company Dissolves Factory in Heavy Rain | Finance | Indonesia
On August 18th, Xin'an Electric Appliance Co., Ltd. was officially dissolved. In the morning of that day, it changed from light rain to heavy rain in Shenzhen. A reporter from First Financial News saw five or six factory recruitment agents and personnel waiting at the entrance of Xin'an Electric's Shenzhen factory to recruit laid-off employees. But the number of employees walking out of the factory gate in brown uniforms remained rare, and this curtain call seemed somewhat bleak.
Xin'an Electric Appliances is an old brand electrical factory in Shenzhen. The company recently issued a dissolution notice, stating that its business situation has further deteriorated in the context of the global economic downturn and reduced orders. The company will pay corresponding economic compensation in accordance with the relevant provisions of the Labor Contract Law.
The dissolution of this old electrical factory is a microcosm of the manufacturing industry's turbulent times. The reporter from First Financial News learned that the employee compensation has been completed, and the orders originally belonging to Xinan Electric will be handed over to other enterprises under the same group to continue production in the future.
Partial orders flow to Indonesia
"The factory is understaffed today, and each department has one or a few people left to finish," an employee of Xin'an Electric told a reporter from First Financial. The Xin'an Electric Appliances in the rain appear deserted. Looking in from the entrance, there are few vehicles on the main road of the factory area, and a few employees occasionally pass by.
The reporter from First Financial News learned from several employees of Xin'an Electric Appliances who had left the factory that there were over 900 employees of Xin'an Electric Appliances before the dissolution. On August 17th, the employee received economic compensation, which is calculated by multiplying the length of service by the average monthly salary.
The history of Xin An Electric's Hong Kong funded enterprise, Xin Ma De Group, can be traced back to 1969. According to the website of Xinmade Company, it established an advantage in the field of small home appliances from its inception and transferred the entire manufacturing process to mainland China in the mid-1980s.
According to Tianyancha, Xin'an Electrical Appliance Manufacturing Factory in Bao'an District, Shenzhen was established in 1989, specializing in household appliances, hair curling appliances, and other products. It is located in Buildings A, B, C, and D of Phase II, Huangtian Yangbei Industrial Zone, Xixiang Street, Bao'an District, Shenzhen, with an operating period until 2010. According to the National Enterprise Credit Information Publicity System, Xin'an Electric Appliance Co., Ltd. was established in 2011, with its address overlapping with the above address, and new buildings E, F, and H have been added.
Several employees of Xinan Electric told reporters that the factory has been standing here for more than 30 years. "Many people work here, from having children to having grandchildren," said a security guard familiar with the situation in the opposite factory area of Xin'an Electric.
Given the high proportion of employees with around 10 years of service in the factory, many employees receive compensation ranging from 70000 to 80000 yuan. Several employees revealed that employees with around 30 years of service can receive compensation of several hundred thousand yuan, with some supervisors receiving 600000 yuan and executives receiving compensation of up to 800000 to 1 million yuan.
Several senior employees have personally experienced the changes in the factory's production situation. An employee who has been managing equipment in the factory for 12 years said that during the peak period of the factory's development, there were 17000 employees, and about 20 containers came to the factory every day to load goods. The factory produces small household appliances such as coffee machines and beer machines, sells them to the European and American markets, and labels them with brands such as Philips.
"But recently there have only been a few containers coming to the factory to load goods," said an employee. Several employees also stated that the decline in factory orders has been more pronounced since the beginning of this year, and the company has gone through several waves of layoffs, each time reducing dozens or hundreds of employees. The employees of Xin'an Electric Appliance Office previously revealed to First Financial reporters that in the previous round of layoffs, the number of employees in the company decreased by about half.
Two employees of this factory told First Financial reporters that a few years ago, Xinmade established a new factory in Indonesia and transferred some orders to the factory, which has relatively lower labor and other costs.
There is also relevant evidence on the website of Xinmade Company, which shows that in 2019, Xinmade established its first overseas factory in Indonesia. A reporter from First Financial called the company contact number recorded in the annual report of Xin'an Electric Appliances, and a company office staff confirmed to the reporter that after Xinmade established a factory in Indonesia, some orders of Xin'an Electric Appliances were transferred to the Indonesian factory.
Brother companies have significantly reduced staff
Apart from the Indonesian factory, the reporter from First Financial learned that after the dissolution of Xin'an Electric Appliances, other companies of Xinmade Group will share the production of similar orders.
Several employees of Xin'an Electric confirmed that there are other factories under Xinmade with similar properties located in China, including Xinfeng Electric Co., Ltd., Xinsheng Electric Co., Ltd., and Xinmaki Industrial Co., Ltd. The staff from the office of Xin'an Electric Appliances mentioned above told reporters that these factories will continue to accept orders from Xin'an, and currently they are still operating normally.
According to the National Enterprise Credit Information Publicity System, Xinfeng Electric Appliances is also a wholly-owned legal entity from Taiwan, Hong Kong, and Macau. It was established in 2011 and its shareholder is Xinmade Industrial International Co., Ltd. Its licensed business projects include household small appliances. Xinsheng Electrical Appliance Co., Ltd. was established in 2013 as a wholly-owned foreign legal entity, with the enterprise email ending with "simatelex. com. hk". Its business scope includes research and development of household appliances, production and operation of household small appliances and their accessories, ice cream machines, ice cream processing machines, etc.
Against the backdrop of a decrease or even dissolution of orders from Xinan Electric Appliances, what is the production and operation status of Xinfeng Electric Appliances and Xinsheng Electric Appliances? On August 18th, the first financial reporter repeatedly called the contact numbers recorded in the annual reports of Xinfeng Electric and Xinsheng Electric, but none of them were connected.
The annual report of the company shows that the number of employees at Xinfeng Electric and Xinsheng Electric has also decreased. According to the annual report of Xinfeng Electric Appliances, in 2016, the number of employees who paid basic medical insurance and unemployment insurance decreased from 4809 to 4237 in 2017. Subsequently, it revised its 2018 annual report to increase the number of employees from 4243 to 3860. According to the 2019 annual report, Xinfeng Electric Appliances paid 3740 employees for basic medical insurance and unemployment insurance. In the following three years, Xinfeng Electric did not disclose the number of employees or social security information.
According to the annual report of Xinsheng Electric Appliances, in 2016, the number of employees who paid basic medical insurance and unemployment insurance was 2599, but after years of decline, it was 1667 in 2019. The latest disclosure of social security information by Xinsheng Electric was in its 2021 annual report, which showed that 274 people had paid basic medical insurance and unemployment insurance for their employees.
After the dissolution of Xin'an Electric Appliances, employees are also thinking about their future direction. In the rain, multiple employees were surrounded by recruitment agencies and factory personnel, and then left holding flyers. Near the Xin'an factory, there are many factory recruitment flyers posted on billboards, utility poles, and walls. Several employees of Xin'an Electric said that they would continue to look for jobs even if they received more objective compensation. If there is no suitable position in Shenzhen, they may consider returning to their hometown.
