Reshoring Example: Houston-Based Farouk Systems

From The Financial Times:

"Farouk Shami, chairman and main owner of Houston-based Farouk Systems, made an unorthodox choice when he decided where to expand production of his professional hairdressing equipment. Rather than adding to his existing workforce in Asia, Mr. Shami expanded in Texas.

More of his products now carry the “made in America” label after the decision four years ago to cut back on the work he was giving to subcontractors, based mainly in China and South Korea, in favor of expanding local production.

As a result his company – which supplies professional hairdressers with high-tech dryers, hair curlers and other specialized equipment – has added 400 jobs to its Texas-based workforce, which now totals 2,000.

Production costs are only slightly higher in the U.S. than in China, he says, because the workers are more efficient. “I may need to employ only 15 people to do a job that would require 70 in a Chinese factory,” said Mr. Shami.

This year 80% of his company’s production is being done in the U.S., compared with 40 per cent in 2007. His sales have risen by about 20% since the decision to expand the domestic operation."