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Compounder Kingfa adding capacity in Asia

By: Nina Ying Sun

April 6, 2012

ORLANDO, FLA. (April 6, 11:25 a.m. ET) — China’s largest compounder Kingfa Science & Technology Co. Ltd. is continuing the momentum to build capacity in Asia — including India. In the meantime it is also taking leaps in expanding vertically toward upstream to add high value-added materials to its product portfolio.

The Guangzhou-based company has launched a plant in Tianjin in north China that has annual capacity of 100,000 metric tons and designed total capacity of 400,000 metric tons, said Willis X. Guan, deputy president of global sales and marketing, at NPE2012. Another new plant in Kunshan in east China is nearing its completion and performing test runs. It has a designed capacity of 400,000 metric tons.

In order to tap into the growing market in India, Kingfa has established a subsidiary in India, and is planning to build a factory. “We are in the process of picking a location for the plant and decide on the capacity based on local demand.”

With the Tianjin and Kunshan plants coming on stream, Kingfa now claims total compounding capacity of 1.2 million metric tons. Compounding now represents more than 90 percent of the company’s sales.

The publicly listed company in 2008 started what it called a transition to “upstream and high-end materials synthesis,” both through organic growth and acquisition.

It has since built a 1,000-metric-ton facility for nylon 10, 50 percent of the content derived from castor oil. An expansion is currently under way to launch 10,000 metric tons of capacity by 2014.

PEEK is another new member to the Kingfa family of products. Tsuyoshi Wen, director of high performance polymers said the capacity is about 50 metric tons for now with another 200 tons under construction.

Kingfa is investing $300 million on the startup of its carbon fiber project for such end markets as automotive and appliances. It expects to have 200-metric-metric tons of production capacity by the end of the first half of 2012. “Eventually, we aim to expand it to 2,000 metric tons of carbon fiber and 10,000 metric tons of carbon fiber composites,” Guan said.

High growth in “green” materials

With a R&D team of 100-plus, Kingfa launched 30,000 metric tons of capacity of 100 percent biodegradable EcoPond-branded polylactic acid/polybutylene succinic polymer in August, which gives the company a leading position in the market, said Kin Wong, marketing director of biodegradable polymers.

Kingfa also announced that a second-phase of the project, which will add 60,000 metric tons of capacity, is being planned.

Kingfa’s EcoPond is mostly exported at this stage, although the Chinese market is expected to take off soon with the latest move by the Chinese government to promote such materials.

About 90 percent of the exports goes to Europe and is used to make shopping bags, trash bags, toys, and food service products. “We work on both government procurement and retailer’s projects,” Wong said.

He said he’s very optimist about the U.S. market, where has seen a flurry of regional bag bans. He said the EcoPond material offers very competitive prices with reliable quality.

In China, Kingfa is working with municipal governments to promote the use of biodegradable trash bags as well as agricultural films. Wal-Mart is offering biodegradable bags at 150 stores. Another retailer Jusco is also started “full use” of bags made from Kingfa’s material.

Wong said the booth has attracted many customers from North and South Americas that showed strong interest in the biodegradable materials.

On the acquisition front, Kingfa acquired Singapore’s wood plastics materials supplier Lesco and expects to reach 15,000 metric tons of capacity by the end of the year.