CUSHION maker Caldeira is creating 20 jobs at its Knowsley Business Park factory, by switching work back from its Chinese plant.

Founder Tony Caldeira first mooted the move in September, citing rising wages due to inflation, increased red tape, and a rising Chinese currency.

He confirmed the switch yesterday linked to an upturn in the company’s UK order book, but also high wage costs in China which he said have soared five-fold in the past eight years, making the UK more cost-effective.

He said: “I never thought I would say this, but certain cushion covers which are made from Chinese fabrics are now cheaper to produce in the UK than in China.

“Our customers are deciding that our Merseyside factory is now more competitive due to the increased costs and operational difficulties they are facing when doing business in China.”

He said, when Caldeira formed its Chinese joint venture in 2004, a production worker there earned around £50 a month: “Now the same worker expects a salary of around £250 per month.”

He added: “Of course, our UK staff still earn considerably more than our Chinese staff, but productivity is higher in our Merseyside factory and the percentage of labour cost in more expensive cushions is relatively small.

“So, when you also include other extra costs such as extra packaging, manufacturing profit, additional shipping costs and, most significantly, the difference in duty rates between fabrics and finished goods, the cost differential between Chinese and UK cushion manufacturing reduces considerably.”

Mr Caldeira went on: “China still has a very important part to play in Caldeira’s plans for the future, but it is no longer a one-way bet. The tide is turning and global rebalancing has begun.

“More importantly, if this move is repeated around the country, this news could have positive implications for British manufacturing and for the British economy as a whole.”

The Knowsley cushion manufacturer has also recently added staff in its commercial team, and a new role of global sales manager is being created to help grow the business throughout next year.