All photos by Jason Chan
Broadway Industrial Group is one of the world's top manufacturers of actuator arms for hard disk drives (HDD) and a leading producer of eco-friendly foam solutions for packaging, insulation, automotive and other aplications.
It has 15 manufacturing facilities in China, Thailand and USA with more than 15,000 employees.
Together with three analysts from Singapore, I visited four of Broadway's facilities in Shanghai, Chongqing and Shenzhen recently, viewing their foam plastics, HDD and non-HDD components operations.
Broadway has a huge facility in Shanghai for foam plastics with 21 buildings for covering various production lines and warehousing storage.
The range of products made by the foam plastics division include packaging for consumer electronics products, for automotive components as well as insulation components.
Many of its major clients for foam plastics are located in Shanghai and Broadway has a plant there as there is a practical necessity to be less than 200 km away from the customer's factory.
The foam plastics division’s facility in Shanghai places it close to most of its major clients – a key requirement given the practical inefficiencies of shipping foam plastic products. The division also has other plants in Suzhou, Chongqing, Chengdu and Shenzhen.
What is the function of the actuator arms that Broadway has a niche in?
The full name of this component is quite a mouthful: "Voice Coil Actuator Arm".
HDD Precision Components
We also visited Broadway's production facilities for HDD precision components in Chongqing and Shenzhen.
Chongqing is one of China's five national central cities (the others being Beijing, Tianjin, Shanghai and Guangzhou).
A factory was established in Wanzhou, Chongqing, which is further inland, by Broadway two years ago to address the escalating cost of labor in China's coastal cities.
There, the minimum wage is one third lower than in Shenzhen.
Broadway has relocated the more labor intensive processes of its HDD division to Wanzhou, while retaining its Shenzhen facility for high-automated processes.
Even though labour costs in Wanzhou are lower than in Shenzhen, Broadway has automated the transferred operations to move ahead of the labour cost curve which is affecting all of China.
Since commencing operations in 2011, Broadway's Wanzhou facility has been used by the local government as a model manufacturing plant to showcase the district's development as an up-and-coming industrial hub.
Broadway has retained its Shenzhen facility for highly automated processes, while labor intensive processes are located in Wanzhou, Chongqing.
Non-HDD Precision Components
At its Shenzhen facilities, Broadway manufactures non-HDD components such as flow control devices for semi-conductors using precision engineering CNC machines.
It also manufactures components for the automotive, medical and scientific instrument markets there.
Broadway's strategy is to defend its profit margins by rightsizing its HDD operations, expanding and strengthening its non-HDD operations, as well as maintaining and growing its base of strategic customers.
According to analysts, Broadway's main customers for its HDD division are Seagate and Hitachi.
For foam plastics, its main customers include Airdex, Canon, Foxconn, Seagate and HP.
For its non-HDD precision component business, main customers include Applied Materials, Bosch, Fuji Xerox and NEC.
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