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Sticking cheap bridal gown It To China
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Sticking It To ChinaPublished: 30 May 2009 19:48:39 PST

Author: Pietra Rivoli

Good things might come in small packages, but all things come in some kind of package, and most of those packages are sealed with tape. So when 3M veteran Tom Dodd took over TaraTape, a Philadelphia-based adhesive tape manufacturer, in 1987, the future seemed secure.

After all, TaraTape’s bread and butter product line was the packing tape that seals the boxes that transport the world’s stuff. Sure, TaraTape’s business might ebb and flow with the economy, but Dodd thought there would always be demand for his packing tape.

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But by the mid 1990s, Dodd was feeling the first winds from Asia. Suddenly, cheap packing tape from China and Taiwan began to batter his business, bringing market prices down to unprofitable levels.

At the same time, U.S. manufacturing was in decline, meaning that more and more boxes were being sealed abroad. And American firms, including Dodd’s old employer, St, Paul, Minn.-based 3M ( MMM – news – people ), were cutting costs by manufacturing their tape in China.

Dodd went to China to see for himself the competition and quickly realized that competing with Chinese tape factories based on cost was a fool’s errand. But on the same trip, he caught a glimpse of TaraTape’s future. At the time, China was funneling cash into massive infrastructure projects, expanding the power grid and building hundreds of new roads and bridges. Many of these infrastructure projects used high-performance industrial tape to secure components of suspension bridges and electric grids during the construction process.

When he returned home, Dodd gradually ceded the packing tape business to Asia and aggressively re-tooled TaraTape as a producer of high-performance industrial tape. Today, TaraTape has profitable niches in high-performance-tape markets in the U.S., Mexico, Canada and China. In addition to the infrastructure uses, TaraTape’s products are also used to bind “umbilical” cables in offshore oil rigs to deliver power from the rig to the deep-sea drilling operations. Wal-Mart ( WMT – news – people ) is another major customer. The retailer has found that securing pallets with the high-performance tape is both more effective and more environmentally friendly than using standard shrink-wrapping.

Cost and risk are the two critical factors in the tape business; while customers care about low prices, they–most of all–need their tape to stick. Most standard packing tapes do an adequate job of sealing boxes, even if the product does fail on occasion. Cheap tape is fine for many purposes, particularly when the cost of failure is modest.

TaraTape’s new customers, however, are less concerned with price and more concerned with the risk. At the low end of the tape market, failure might mean a box opening during shipping. For industrial applications, however, if a tape fails to stick, it can endanger the umbilical link between an offshore windmill and shore or delay the construction of a new bridge at substantial cost.

TaraTape’s customers are willing to pay a premium because of the firm’s proven quality. Some quality problems with Chinese-made tape are real and some are perceived, but either way, many customers prefer to avoid high-performance tape made in China. In addition, at the high end of the tape market, the Chinese labor cost advantage is small, thanks to TaraTape’s highly automated manufacturing process.

TaraTape’s small size–annual revenues are approximately $20 million–also confers some advantages in the competition against industry giants. Intertape Polymer Group ( ITP – news – peoplelithium batteries Share trading FX 比較 除湿机 实验室家具 工作流 深圳装修公司 乳化机