Rencol Tolerance Rings expand in China

The new office is to be staffed by Chinese nationals, led by Shirley Zhang. According to Rencol Tolerance Rings' managing director, Jim Smith, Shirley is "A highly qualified engineer who we are lucky to have found with the help of the CBBC." CBBC is the UK's leading agency helping British companies to do business in China. It delivers a range of practical, cost-effective services to British companies wishing to export goods and services to, invest in, or establish manufacturing under license arrangements with China (www.cbbc.org).

Rencol will share its new Shanghai offices with other companies in the Wyko Group such as Wyko Tire Technology and Revolvo Precision Products. These companies, like Rencol, are specialist equipment manufacturers and have followed old customers out to China.

The potential for tolerance rings within the Chinese automotive and appliance manufacturing market is rapidly being exploited. Jim Smith, who has travelled to China on many occasions, says: "The value of the market in 2007 is only $250,000 which is pretty small. But, this is a 40 per cent growth on 2006 and we are expecting to see a 40 per cent growth in 2008". Jim is also quick to point out that these figures do not include the well-established, $5million, HDD (hard disk drive) market, which Rencol has been selling directly to for some time.

Chinese manufacture for Chinese market only

One important point is that, despite Rencol having plans to develop the Chinese trading company into a manufacturing operation, this is only intended to supply the domestic Chinese market. Presently, all of the tolerance rings sold in China are manufactured at Rencol's UK base in Bristol, but it is important for growth in the Chinese market that customers can source local components.

Speaking about the difficulty of setting up a business in China, Jim Smith says: "The biggest challenge is in understanding the regulatory framework in China; it is not the same as when you set up a business in any other country.

"Another challenge, and similar to other Asian countries, is the need to build relationships over a long period of time. Rencol first sold products in China in 2001, but it has taken around five years to reach this point."

The new Chinese office is to be managed by Jerry Zhang (no relation to Shirley) who is based in Singapore and who is very excited about the possibilities the new trading company represents. Jerry says: "This new company will give Rencol the springboard that it needs in order to exploit the massive opportunity that the Chinese market represents. We have a long-term commitment to growing the business and with this venture we are truly taking the technology of tolerance rings into new markets and are confident that our customers will soon experience the great advantages that tolerance rings can provide over other fastening solutions."