Feng Ping, Fiocchis blend East and West with great success

The last time the Fiocchi brothers staged a fireworks show, the local mayor made them promise that their next display would not occur on their plant’s grounds. That’s why on this clear, June evening we find ourselves in an abandoned quarry outside Feng Gang, China, a bumpy, 10-minute, mostly off-road drive from the brothers’ wholly owned molding, moldmaking, and assembly shop.

Over three days in June, IMM’s Tony Deligio was given unfettered access to John and James Fiocchi’s wholly owned Chinese molding and moldmaking shop in Feng Gang, China, including its workers, the plant itself, and the brothers’ business plan. In this second of three segments, IMM shares insights into a unique company doing business in China, and the precise cultural mix that has resulted in a boom for Feng Ping. You can read the first installment here.

Open at one end, where the entire plant’s staff is being carpooled in, the quarry is completely enclosed at the opposite end, with high granite walls encircling a small pond at the base. In front of the water, John Fiocchi and some of his staff, using the headlights from the plant’s truck for illumination, have arranged the fireworks in orderly rows, grouping them by size and pyrotechnic variety for this evening’s impromptu show.

Throughout the former quarry, Feng Ping workers tear into boxes of roman candles, bottle rockets, and all manner of smaller fireworks, setting them off in every direction so that the pitch-black night is sporadically illuminated, as shrieks, pops, and explosions reverberate all around, and the smell of gun powder permeates the cool, night air.

Soon the bottle rockets and roman candles are drowned out by thunderous explosions at the far end of the quarry, where the silhouettes of John and a small group of Feng Ping workers can be seen racing from device to device, igniting them in a sequence as they go. Everyone in the quarry cranes his neck skyward, as explosions come in rapid-fire succession in a display that would put most municipal U.S. shows to shame.

Incendiary growth
You can easily draw a parallel between the rapid rise and sudden explosion of the fireworks and Feng Ping’s breakneck ascension and expansion. After starting out in 2007 with 8000 ft² of space, three presses, and 19 workers on the ground floor of a three-story manufacturing facility just outside Shenzhen in southern China, John Fiocchi (46) and his brother James (49) moved down the road in November 2009 into a newly built 85,000-ft² plant, with 12 machines and about 180 workers.

Originally intending that their Chinese operation support their own off-the-shelf enclosure business, it soon was using excess capacity to supply custom moldmaking, molding, and assembly work. By the middle of 2009, Feng Ping was actively selling its services, and the brothers’ pitch—“USA-quality tooling at the China price”—gained instant traction with western molders. The Fiocchis’ business has tripled every year since the company’s inception, and by March 2010, Feng Ping had already eclipsed all of 2009’s sales in only three months.

From OEM to custom molder/moldmaker
For 25 years, as principals at off-the-shelf enclosure businesses Box Enclosures Inc. and EAI Enclosures Inc., the Fiocchis had run a successful business, initially sourcing molds and molding from China in the 1990s as competitors did.

Like many western companies that try to exploit China’s low-cost tooling and molding, the Fiocchis endured plenty of trans-Pacific headaches over the years, with the frequency and severity of supply issues growing in direct correlation to the number of molds in country. That figure reached 575 by 2005, and in 2007, a tipping point was reached with delivery and quality issues threatening a major supply disruption for the enclosure businesses and its more than 60 global distributors.
 
It was at that time that James and John headed to China on what they called a mold-rescue mission, taking four months to track down tools scattered among six different shops, many of which had changed hands, names, and contacts since the Fiocchis first shipped off the business.

Under Chinese law, foreigners cannot technically own anything in China, even a mold they have paid for, so beyond the logistical challenges of the mission, it posed significant legal hurdles as well. By the end of the ordeal, James and John had collected their nearly 600 molds, as well their myriad inserts, temporarily storing the tools, which had been loaded onto pallets, on the first floor of a three-story building in Feng Gang.

At that time, the plan was to hire someone locally to manage the outsourced production of the enclosures, but after several more negative experiences, the brothers decided on a new approach. They would start up their own China-based shop, trading the potential headaches of a local partner for the challenges of running a business in a foreign country.

Early on, the brothers made several commitments they felt would help ensure success: They would learn Mandarin; they would set up a wholly foreign-owned enterprise (WFOE); one of them would always be in country, with the brothers taking turns between their Chicago-area homes and the plant; and they would cherry-pick the most talented Chinese nationals they had collaborated with over their nearly 20 years of work in the country to build out their staff.

Fireworks shopping
“Twisted”—that’s how John describes the fireworks he’s trying to track down for the impromptu show. Doing business in China since 1989, the Fiocchis have immersed themselves in the local culture, including the business mores that can drive inexperienced Westerners crazy. We’re at a local market where, the day before, John had asked after a previous fireworks hookup. An employee fetches a woman from the back, and after some negotiations in Mandarin, including just what kind of fireworks are available, the young worker joins us in the plant van, and we depart to an undisclosed location.

When dealing with the Chinese, questions are rarely given definitive answers, and quite often, you’re more likely to hear what they think you want to hear vs. the truth. John and James understand this, and their more than 20 years of negotiating with the Chinese, even for fireworks, is a big part of Feng Ping’s success.

The young employee directs the van to another store, where a second worker, bearing keys, joins us in the car and guides us out of the city and up a dirt road to a concrete storage unit backed up against a hillside. Behind a locked steel door, large boxes are stacked floor to ceiling. The Fiocchis excitedly begin to pull boxes off, acknowledging that these are indeed the outsized pyrotechnics they were looking for.

The smallest fireworks weigh 20 lb and the large ones require two people to carry them. Not packed with individual devices, the entire box is a firework that, when opened, reveals a single, long fuse. More than 30 boxes and a cash payment later, the Fiocchis arrange to have the fireworks delivered to their plant. —Tony Deligio