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September 22, 2017

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Bike plants ride sharing boom well

Service providers' orders help expand factories, raise sustainability concerns

In 1999, when he was still 18, Ruan Hongming found employment in a bike factory in Shenzhen. But the worker from Guangxi Zhuang autonomous region left the job in 2002 as he didn't forsee bright prospects for the industry. Fifteen years on, he has rejoined the business.

Now 36, Ruan was persuaded by an ex-colleague at Komax to return. "I decided to rejoin when I learnt Komax had received a huge order," Ruan said.

Komax hired him to lead and train 40 fresh hires for a new production line, one of 12 such lines the factory is building in Shenzhen, Dongguan and Foshan, to meet the demand from a new business segment-bicycle sharing.

Xue Mingjun, CEO of Komax, said upon completion, the new and old production lines' monthly capacity will increase from 5,000 units to 500,000 units. Another 200 new workers will be hired by this month-end.

Komax received an order for 200,000 units from a bicycle-sharing company for delivery in the first quarter, which prompted Ruan's comeback.

Komax is not the only company benefiting from the boom in bicycle sharing. The business has spawned new opportunities for bicycle manufacturers across the country.

About 29 bicycle-sharing service providers have placed more than 2 million bicycles on streets around China. This figure is expected to rise tenfold to 20 million units this year, equal to last year's total sales in the domestic market, according to the China Bicycle Association.

Bicycle-sharing companies are striving to cover many cities as quickly as possible, a move requiring large-scale production, which should explain big orders of the kind that Komax received recently.

The trend started in the second half of 2016, stirring up a wave of facility expansions across the whole industrial chain, encompassing time-honored brands, medium-sized assembly factories to small accessory plants.

The ongoing frenetic production is evidence of how innovation leads to upgradation of China's real economy, as Premier Li Keqiang stressed in this year's Government Work Report.

He said "the nation will further implement the strategy of driving development through innovation, optimize the structure of real economy and keep improving quality, efficiency and competitiveness".

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