1. Tony Caldeira Founder & CEO Caldeira

2. Caldeira A re-shoring case study Brief introduction to Caldeira Key factors behind re-shoring Issues for companies re-shoring What should Governments do?

3. Caldeira UK – Introduction 1991 – 2003 Founded 1991 by Tony Caldeira in Liverpool, UK Sells cushions & textiles to volume retailers Grew from a market stall to UK market leader 2003 Sales £5m+ 100+ Staff 2 UK factories Successful UK SME - Then came globalization...

4. Caldeira China – 2005 – 2009 China admitted to the WTO so easier to trade China selling price cheaper than UK cost prices Retailers and supply chain forced to react Simple choice - “China or bust”“step by step” UK designs at Chinese prices - Rapid growth

5. Caldeira UK & USA – Reaction to Globalization Moved upmarket with European fabrics - Fashion Higher quality, faster lead times, service, JIT Advantages - Same language, business culture Advantages - Time zone, currency, close to market Caldeira USA - Opened in New York, rapid growth

6. The Tipping Point Tipping point happened around 2007-2008 Next phase of globalization begins Tide turned - Chinese prices rise faster than West UK & Europe become more competitive each year Two critical factors labour costs & exchange rates

7. Key Factors – Relative Labour Costs Since 2007 Chinese labour costs have rocketed Caldeira China factory staff earnings up 400% 2003 RMB 1000 per month - 2015 RMB 4000 pm 2003 China factory staff earned 10% v UK 2015 Now China staff earn 35% v UK and rising

8. Key Factors – Relative Exchange Rates In 7 years the Euro has dropped by 34% v RMB This makes Chinese goods even less competitive Caldeira Reaction - Downsizing in China step by step Caldeira Reaction - Re-shoring jobs back to the UK Others moving all production home EUR V RMB - JULY 2008 EUR 1 = RMB 10.87 SEPTEMBER 2015 EUR 1 = RMB 7.20

9. Issues for Companies Re-shoring Capacity - Production moved East, capacity lost Skills - Production moved East, skills also lost Supply Chain - China “cluster model” strong Supply Chain - Local supply chain lost in West Finance - Following crash, banks reluctant to lend

10. What Should Governments Do To Help Re-shoring? Aim High – Aim to make the UK & EU “the best place in the world to do business” Create Economic Stability – Sustainable public finances help investment decisions Create a Pro Business Environment – Tax and regulation should be low, simple, competitive & fair “Talk the Talk” – UK is the role model “Britain is open for business!” Sell your market. Prepare and Set Expectations – Educate and advise business and consumers of global changes. Understand – “Tipping point” & help step change Investment – Infrastructure, education &training Incentivise – Help companies to invest & re-shore Opportunity – More growth and jobs in countries which re-shore, both in companies & supply chains

11. Are You Ready For Re-shoring?