Model trains and planes motor their way back home

The business of 'backshoring'
The business of 'backshoring'


    The business of 'backshoring'


The business of 'backshoring' 03:23

Story highlights

  • Part of Hornby's Airfix range, the iconic model plane kit, will soon be made in the UK
  • Now the company can react to market demand much faster and the CEO can keep an eye on the quality
  • In China private-sector wages rose 14% in 2012, up from a 12.3% increase in 2011

UK company Hornby's model planes and trains have been made in low-cost emerging markets for decades. Now, piece by piece, production is being brought back home.

Hornby's iconic model plane kit, part of the company's Airfix range, will soon be made in the UK. The company will be making up to 1,000 of the kits a day.

"It's a very British brand with huge heritage.. once upon a time it was all manufactured here in the UK," says Roger Canham, Hornby chief executive. "Airfix actually went to India, but the marketplace is changing now."

Read more: How the skies tell Head if business will be sunny or gloomy

Hornby's reversal is the latest in the trend of "backshoring" that has seen British businesses such as Topshop, Symington's, Caldeira, and DFS, all repatriating some manufacturing from China in the face of rising labor costs overseas.

Canham says offshoring production has never been easy. "Some of the difficulties you have are going to a different time zone, talking to people who don't necessarily speak the same language, actually, or culturally, or even technically."

Watch more: Sorrell: Eurozone needs leaders

Those were challenges Canham was willing to face when the cost-saving was significant. But such benefits are no longer a given.

In China, private-sector wages rose 14% in 2012, compared to a 12.3% increase the previous year, according to China's National Bureau of Statistics. The ageing population has led to a shrinking labor force, likely to contribute to rising wages in years to come.

Read more: Telecoms boss: Croatia needs reforms

This isn't Hornby's first back-pedal on production in an emerging market. Earlier this year, it brought some of its Humbrol paint facility back from China following labour disputes and concerns about quality. Offshoring production also meant there was a lag time in meeting consumer demand.

"Just the physical shipping time will be about four weeks," Canham says. "So even if we found out today that this product was selling very strongly and we placed additional orders, that's four weeks of the market that we have potentially missed."

Now the company can react to market demand much faster and the chief executive can keep an eye on the quality of the production of the Airfix models, once more labeled "Made in Britain."

      Marketplace Europe

    • spc marketplace europe latvia valdis dombrovskis_00021207.jpg

      Latvia's economic prospects

      CNN's Nina Dos Santos visits Latvia to speak to the country's outgoing Prime Minister and the prospects for the eurozone's 18th member.
    • spc marketplace europe malta immigration africa_00002118.jpg

      Asylum seekers in Malta

      Malta is the gateway to Europe and on the frontline of the immigration flows. Isa Soares reports from a detention center on the Mediterranean island.
    • spc marketplace europe malta immigration vox pops_00001419.jpg

      Maltese concerned over migrants

      CNN's Isa Soares speaks with people on the streets of Valletta who say their country can't cope with more migrants from Africa and the Middle East.
    • spc marketplace europe malta george vella_00032005.jpg

      Malta's migrant struggle

      Malta cannot afford to continue supporting migrants from war-torn countries in its over-crowded detention camps, the country's foreign minister has told CNN.
    • spc marketplace europe 2013 what went wrong_00020426.jpg

      What went wrong in 2013?

      Slow recoveries, bailouts, and youth unemployment. Richard Quest speaks to Europe's top CEOs about the issues of 2013.
    • spc marketplace europe 2013 defining moments bob parker intv_00010826.jpg

      2013: The year of tapering

      CNN's Richard Quest speaks to economist Bob Parker about defining moments of 2013 and about what to expect in 2014.
    • spc marketplace europe estonia energy_00000923.jpg

      Estonia's dirty energy drive

      The Baltic nation of Estonia is developing its oil shale energy reserves in a bid to become energy self-sufficient.
    • spc marketplace europe nani beccalli falco_00041005.jpg

      GE Europe exec's jobs warning

      Europe must stop being nationalistic if it wants to help a lost generation of workers, the regional boss of U.S. conglomerate General Electric says.
    • spc marketplace europe greece petros christodoulou_00002025.jpg

      Is Greece on the mend?

      Greece is on the way to economic recovery as investor faith returns to the recession-ridden eurozone nation, an executive at Greece's largest bank has told CNN.
    • spc marketplace europe euro jim cloos_00012617.jpg

      Don't blame euro, says pioneer

      One of the masterminds behind the euro says Europe would have suffered a far worse fate if the single currency had never been created.
    • spc marketplace europe maastricht eu_00002401.jpg

      The birthplace of the euro

      Nina Dos Santos visits the Dutch city where the European treaty carrying the city's name came into force 20 years ago.
    • spc marketplace europe spain working hours_00010525.jpg

      Spain may turn clocks back

      As Spain continues its drive to slash budgets and cut spending, one of the nation's favorite pastimes is under threat as ministers look for ways to boost productivity.