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Discussion Starter · #1 ·
A further issue has just arisen in that Sanda Kan , who I believe makes most of Hornbys locos in China, may have been acquired by Kader , who I think own Bachmann.

Very Interesting. Watch for developments

Russell
 

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QUOTE (rb277170 @ 15 Nov 2008, 14:24) <{POST_SNAPBACK}>A further issue has just arisen in that Sanda Kan , who I believe makes most of Hornbys locos in China, may have been acquired by Kader , who I think own Bachmann.

Very Interesting. Watch for developments

Russell

Just as well Hornby still have the factory building in Margate then ?????
 

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*** Kader have indeed given themselves a birthday present!

Here is a short comment I found on the Web

An agreement has been reached allowing model railroad manufacturer Kader Manufacturing Trust to purchase Sanda Kan Industrial, according to industry sources.

Hong-Kong headquartered Kader owns the Bachmann, Williams, Bachmann Branchline, Graham Farish, Liliput and Bachmann China brands and manufactures products for them at its facility in China's Guandong province.

Sanda Kan, also based in Hong Kong, manufactures model trains and accessories at several facilities in mainland China and has made items for Athearn, Atlas, Hornby, rivarossi, electrotren, Life-Like, Lionel, Marklin, and Walthers among others.

According to industry sources, Kader views the acquisition more as a merger of the two companies, with Sanda Kan operating as a separate entity and retaining its current management.

footnote: As of 13th, kader suspended share trading pending a formal announcement of a significant acquisition......

Regards

Richard
 

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QUOTE (34C @ 8 Nov 2008, 10:23) <{POST_SNAPBACK}>Having been involved in manufacturing offshoring, (very different industry) unless the guys at Margate are very phlegmatic, I bet there is some twitchiness. It's not a good feeling not being the master of your fate: and the model industry which is so dependent for revenue stream on new model introductions makes this even more critical. Hornby have so much of their 2008 loco programme delayed, and some of that will be money they already intended to have in the bank, which must be hitting cashflow. Sad to say, this is how successful businesses can get mauled...
I had my suspicions that all could not be well at Sanda Kan. Look at the way Hornby's roaring start with Chinese production began to tail off about 18 months ago: slipping on delivery dates, not having the key products in place for Christmas 2007; which is candidly admitted in their 2007 trading year report. Hornby's best move could be return to the UK: if Vi-trains can knock out competitive product in Italy...
 

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Discussion Starter · #9 ·
QUOTE other way round

sanda kan buys kader

peter

Can't be . Kader Industries is huge in comparison to Sanda Kan. I know where you're coming from by reading that statement, but in fact, the acquiring company may also suspend shares ahead of announcement of major acquisition

Russell
 

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Discussion Starter · #11 ·
QUOTE surely it would be "by the company"??

It may just be that something got lost in translation

I still think most likely that Kader have bought Sanda Kan. This is probably not bad news as it will give more strength to production facilities of both Hornby and Bachmann. Both seem to have been suffering from lack of supply recently. Suspect that of the two Hornby will be least happy. We know it has already been looking at India for capacity.

I would love to see Hornby manufacture back in UK. There are some strengths to that, not least that you own your supply chain and its much closer to you. Hornby's results must be hit by the fact they have failed to deliver quite a lot of the 2008 program. First HST now arrived , but where's the rest? However I'm afraid the reality is that there are less expensive places than UK to manufacture goods ,and Hornby has clearly shown its outto maximise its margin. Any model railway producers in Poland or Brasil?

Agree it does seem odd that ViTrains can knock out reasonable models at lower prices from the Eurozone , than Hornby can from China.

Russell
 

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QUOTE (rb277170 @ 15 Nov 2008, 20:56) <{POST_SNAPBACK}>Agree it does seem odd that ViTrains can knock out reasonable models at lower prices from the Eurozone , than Hornby can from China.

Russell

Lima were doing that as well !!!!

And look what happened to them !!!!
 

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i think the lima story is totally different. they were apallingly managed. the goods were overpriced and nobody was buying them. Hornby have (in my opinion)good management. (despite their handelling of the DCC problem).

I am not so convinced that this is a good developement. we have our 2 biggest model manufacturers in the same basket.

I am actually not so convinced about the raw materials supply problem at Sanda Kan. I suspect there was FAR more to that than we have been given. even given the increase in prices of raw materials the effect on the final model would be virtually negligable. i suspect that SK wanted more money but i think that some of it was an excuse for hornby to put their prices up. I take the reasons for price increases with a pinch of salt.

Peter
 

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I suspect that as well as price increases in raw materials (some over 200% but may be dropping now due to Recession) international exchange rates are to blame. Last month I received emails from a Japanese supplier of model railways who informed me they have put their prices up not once but twice! A lot of it is actually manufactured in China and exchange rates are all over the place.

Regards

David Y
 

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QUOTE (Bilbo @ 15 Nov 2008, 21:21) <{POST_SNAPBACK}>Lima were doing that as well ! And look what happened to them !
Lima persisted with very dated designs long past their sell by date, in the face of superior product for similar money from competitors. Their successors in Italy, Vi-trains, make a better class 37 than Hornby's, at a price intermediate between the very dated Hornby item, and the Bachmann product. Clearly there is money in it, because they are expanding their range. If you look at what Vi-trains make in HO, they can compete for quality with Chinese made Hornby, and the price is pretty close. Wages in Italy are directly comparable to the UK, particularly if Hornby look outside the South East. And none of that long distance supply chain, and need to monitor what is going on thousands of miles away...
 

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QUOTE (Brian Considine @ 16 Nov 2008, 08:59) <{POST_SNAPBACK}>Well, they still have the factory building !

Whilst I dont think for a minute its a likely path to follow, simply because subcontracting frees them of so much capital expenditure in machines and basic tooling, if the £ keeps crashing as it has over the last couple of months, the UK will become a viable place to manufacture exports, although labour costs are still prohibitive here (this may change if unemplyment goes up considerably) as are the beurocratic costs of simply running a business under UK legislation.

As a modeller of US outline mainly I do wonder what ramifications for the big players are, both walthers (with the proto 2000 brand)and athearn appear to have used the same company as hornby, and, of course, are competitors to bachman in the US, much as the Hornby / Bachmann situation here.
 

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It does seem that only a part of Kadar's model railway manufacturing is making stuff for their own account to be sold under their own brand (Bachmann) and a large part is manufacturing for others . And historically they were manufacturing for others before they had a brand of their own - including UK outline , where they were manufacturing for Airfix and possibly Mainline for well over a decade before Bachmann UK was launched

The comment about keeping Sandakan as a seperate business makes some sense in this sitaution. In some respects it might be easier in the medium term to use Sandakan as the part of the Kadar empire that manufactures for other people and the Bachmann own brands going directly to Kadar factories.

But at a more conceptual level , most of the world's model railway manufacturing is currently in China , and as far as I'm aware Kadar and Sandakan seem to have been the doninant players - nobody's ever mentioned a third. This leaves Kadar surely producing a very large proportion of the worl's model railways , and the thing about very high market shares is that they inevitably erode

Setting up a factory to manufacture model railways is not exactly rocket science - it's perfectly possible , and logically sooner or later someone somewhere is going to set up a factory to produce for people who are currently having their production done by Sandakan or Kadar (Hornby are in some respects ahead of the game if they are already exploring Indian production options). Where such a factory might be is a totally open question - whether in South China, North China , India, Poland , Mexico, Ohio, Yorkshire , Spain or whereever . Who might own/set up such a factory is also a totally open question.

But in the long term , a situation where most of the world's model railways are made in S. China and Kadar Inc control all the S. China production is not going to persist . Other producers will appear, either in S. China or elsewhere
 

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Discussion Starter · #19 ·
Really is a whole new can of worms this one. The more you think of it, the more I think Hornby will really need to look for alternatives.

Consider the secrecy with which Bachmann and Hornby develope their new programs. Neither is supposed to know what the other is producing. Yet now we have a situation where a factory(Sanda Kan) owned by Kader (which owns Bachmann)must have pre advice as to what Hornbys forthcoming program is and be involved in developing it- so as its owned by Kader , does it not follow that Kader will know what Hornbys program is ?

Intriguing!

Russell
 

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Two more Chinese model railway manufacturer names are Modern Gala Industrial, and Regal Way: Heljan use the latter. But Kader were the biggest by some margin, and are still larger now with the acquisition of Sanda Kan.
 
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