Cintas Poised for Growth in China
Cintas Corp. is expanding in southern China, and plans to open a plant in Guangzhou, the capital city of Guangdong Province, according to news reports. With plants already established in Tianjin and Suzhou, in the northern and eastern regions, Cintas is set to take advantage of the world’s second-largest economy, which has had annual GDP growth rates of 9-10% for the past 30 years.
Unlike the rental and direct-sale uniform market in the U.S., which has evolved into more hospitality or service-based and smaller companies, China has a growing manufacturing sector “with a great ‘uniform culture,’” said Tim Beagle, managing director of Cintas China, in a recent Q&A in Shanghai Daily. (He manages daily operations and business development in the Asia Pacific Region.) Employees in most industries wear uniforms every day, he says, so Cintas has focused its long-term and early-entry efforts on getting ready for China’s acceptance of outsourcing solutions for clean uniforms.
At this stage in Cintas’ business development in the Chinese market, the company is targeting “industrial, food processing, protective apparel and controlled environments,” says Beagle. “We provide them a total uniform service to help them improve their employee wellness, image, quality and management convenience.” The company has also shifted from its emphasis on multinational companies to local customers. When Cintas built its Suzhouplant in 2009, local factory owners didn’t immediately grasp the value of a package of uniform services, the report said. Now, says Beagle, Cintas’ is seeing the results of its early efforts, with 50% of its business coming from local companies.
With its recognition taking hold, Beagle says Cintas now will enter the next phase of development by replicating that success in other locations. “We do not only evaluate our performance by sales volume and profit margin, but also how quickly we educate, advocate or promote the total uniform service value to the market.” That includes responding to stricter environmental standards proposed by the Chinese government. Cintas has implemented wastewater treatment and recycling systems in its Chinese facilities to demonstrate its stewardship. Click here and here to learn more.