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Put Out Of Business By Chinese Imports, Gordon Styles Started A 3-D Printing Company In China

This article is more than 7 years old.

British engineer Gordon Styles, 52, runs Star Rapid in Zhongshan, China. A maker of prototypes and custom parts, it has 220 employees and expects 2016 revenue of $15 million. His customers include first-time inventors, mid-sized product development firms and big car companies. In this interview, which has been edited and condensed, he describes how his previous business in the U.K. imploded in the face of Chinese imports, what it was like to move to China with no money, connections or language skills, and how he built a business from nothing.

Susan Adams: Tell me about your background.

Gordon Styles: I grew up in the U.K. in an industrial northern city in decline, a bit like Flint, MI. When I was 18, I joined my father’s small business. He passed away soon after that, I grew the business and I eventually built what was the U.K.’s largest 3-D printing firm. I sold it in 2000 for $2.1 million.

Adams: How did you decide to start a business in China?

Styles: After the sale, I set up another company in the U.K. We produced railway car components. But China had started to become a manufacturing force. I lost a contract and then another contract to Chinese companies. They were offering pricing that was one tenth of mine. I went to China for a week in November 2004 and saw a real mix of manufacturing companies. Some were just terrible. I was astonished that they were in business.

Adams: What was terrible about those companies?

Styles: Some literally had no doors. You would just walk in off the street and there was muck and dust everywhere. The machines were falling apart and the people were barely wearing clothes. They were like the death traps that existed in the U.K. in the early 1900s. At the same time, I saw some excellent foreign-owned companies that were being run like Western businesses.

Adams: What kind of shape was your business in when you made the decision to move to China?

Styles: It was failing. I lost everything because of Chinese competition. By the time I left, I was broke. I had $8,000 left.

Adams: How did you finance your move and startup costs?

Styles: I bought a one-way ticket and I wrote a business plan to create another 3-D printing company. I went to Hong Kong and within a few days I got a visa and traveled to China. I rented the cheapest room I could find, for $5 a night and I set up an office in my bedroom. I filed papers to start a company in Hong Kong. It cost me $5,000 total.

Adams: What kind of products could you make in your bedroom?

Styles: The first product was a prototype for a lawnmower cover. I had found suppliers and bought a 3-D printer and a cutter to create shapes. I started selling more products and that allowed me to keep going.

Adams: How long did you work in your bedroom?

Styles: It took me two years to become a proper company. I incorporated in China in 2007.

Adams: Didn’t the Chinese government require you to have a Chinese partner?

Styles: Industrial businesses like mine were allowed to be wholly foreign-owned for at least 12 years.

Adams: Had you studied Chinese before you moved there?

Styles: That was one of the biggest challenges. I was very lucky. I met a girl in a café who spoke excellent English. She became my translator and for a while, my girlfriend.

Adams:  How did you expand from your bedroom to a factory?

Styles: When I incorporated, I started with four people and we just did what you’d call trading. We bought from suppliers and sold to customers in the West. Everything is so cheap there, it’s easy to make money. But the suppliers were unreliable and by 2009, I decided I needed my own factory.

Adams: What kind of problems did you have with suppliers?

Styles: They just want your money. No one wanted to do a good job. The only way to get good work out of them was to have one of your people in their factory all day long. That’s why importers from America, Europe and Australia send thousands of people to China as quality control engineers. They stand inside factories all day long and through the night. I was going to the factories of my suppliers and making sure they did things properly. Sometimes I taught them how to do things.

Adams: Who were your customers?

Styles: Prototyping companies in the U.K. and the U.S. who would sell the products we made to their customers.

Adams: How did you find them? What kind of marketing did you try?

Styles: My original customers came through word of mouth and networking.

Adams: Did you sell to Chinese customers, too?

Styles: No.

Adams: How difficult was it to open your own factory?

Styles: Very difficult. The stack of paperwork I had to complete was nearly a foot high. It took a year to set up the company. That compared to one hour of paperwork to set up a company in Hong Kong.

Adams: How much capital did you need?

Styles: All the capital came from our profits. We’ve invested $4.5 million in equipment.

Adams: How challenging was it to find trained workers?

Styles: There are tens of millions of young people trained as technical apprentices at a very basic level. We train them over two or three years.

Adams: What mistakes did you make?

Styles: To begin with, we relied on local middle managers, mostly men. We found out that women make much better managers.

Adams: What’s wrong with male managers?

Styles: The religion of China is money-making. They make Americans look like socialists. They don’t care what relationships they burn or what carnage they leave in their wake. That attitude is much more prevalent among men than women. We went to the police about a guy who set up a company while he was working for me and took all the customer information from our database. The police arrested him but nothing happened after the arrest.

Adams: Were your female managers more reliable?

Styles: Most were but we had one woman who stole $60,000 out of our cash safe and spent it gambling in Macau. The woman’s husband was a gang member who had been stabbed and she needed money to pay for his life-saving operation. The police told me that if I pressed charges, her family would kill me.

Adams: How could you continue to do business in a place where managers were stealing your customers and your cash?

Styles: The entire system is set up to remove money from foreigners and put it into Chinese bank accounts. So you have to have security. We have three people who work full-time on securing our information and our money.

Adams: Still, you make the business environment sound chaotic and ruthless. Why stay there?

Styles: Because you can make a really good product for half the price of a European company and you can make a great profit. But you have to be tough. We often see companies who try to run a Western-style business exactly the way they would do it in Europe or America. You’ve got to be much tougher.

Adams: What are your profit numbers?

Styles: Our gross margins are 50% and we have 14% in net profits.

Adams: How have rising wages affected your business?

Styles: Wages are rising but efficiency is rising faster. It’s a myth that China is becoming too expensive to operate in. Our labor costs are going up by 8% but our efficiencies are going up by between 10% and 15%.

Adams: What do you think about President-elect Trump’s charge that China has an unfair trade advantage over the U.S.?

Styles: There is a fundamental misunderstanding about what is going on between China and America. The Chinese are not exporting anything. It’s the Americans and the British who import things. The Western engineers are going to China, developing suppliers, and they are doing quality control on everything that is being shipped to the West. It’s almost impossible to find a Chinese business that knows how to export. It isn’t China who is doing anything to the West. It’s the West who is doing things to the West.

Adams: How do you like living in China?

Styles: It’s lovely. The weather is a bit like Florida. The food is fabulous. Generally, the people are very, very friendly. There’s minimal crime here.