China’s WPC industry still growing

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: November 6, 2012 6:00 am ET

Ningbo Helong New Material Co. Ltd., an maker of WPC decking and outdoor products, displays its products outside its Ningbo, China, factory. (Plastics News photo by Steve Tololken)

Related to this story

Topics Materials, Suppliers, Construction, Consumer Products

The domestic market is growing, pushed by government infrastructure spending, but the sizable increase in manufacturing capacity runs the risk of worsening already difficult conditions, said Toland Lam, president of the Wood Plastic Composites Committee of the Beijing-based China Plastics Processing Industry Association.

“We are really facing hard competition nowadays, that is what I’m worried about,” said Lam, speaking in an interview at the China Sixth International Forum of WPC, held Nov. 3-4 in Ningbo. “You can see the property development market in China is not doing well ... Worldwide there is nowhere to go. The USA is recovering a little. Europe is sinking.”

Still, he said, investment continues to come into China’s WPC industry, either because people see potential or because they don’t study the market closely enough and instead are attracted by WPC’s reputation as an environmentally friendly industry.

“A lot of people don’t do a really full study,” Lam said, who is also chairman of one of China’s most prominent WPC firms, Meixin Manufacturing Co. Ltd. in Shenzhen. “They just jump in.”

Precise figures don’t exist for the WPC market in China, but the CPPIA WPC committee, which organized the Ningbo conference, estimates that 2011 production was about 1.5 billion pounds a year, with capacity of 2.2 billion to 2.6 billion pound.

Vinyl-related WPC accounted for about 661 million pounds of production, with the remaining 881 million pounds split among high density polyethylene, polypropylene, ABS and other materials.

Estimates at the conference said Chinese production will grow 15-25 percent a year for the next few years, which if that pans out, would push production over 2.4 billion pounds by 2015. Capacity is likely to rise faster than production, executives said.

While China’s housing market is slowing down, local governments are using a lot of WPC in building new parks and other public projects, he said.

“I think China’s business is still a little bit investment driven,” said Wayne Song, vice president of the WPC committee. “It is not demand driven. A lot of cities and a lot of provinces are still investing.”

Also, he said ongoing reconstruction following the 2008 earthquake in Sichuan Province is giving a boost, with one project alone using 110 million pounds of WPC materials, he said.

Some industry officials say WPC is popular with government projects because it uses recycled materials as feedstock and because it fits with government desire to support “new materials” industries.

Song, whose is also president of WPC machinery firm Futuresoft Technologies Inc. in Manalapan, N.J., and Jiangsu province, said that based on equipment sales, the WPC industry is doing much better than many other machinery markets and better than China’s economy as a whole.

One analysis presented at the forum, from Austrian WPC consulting firm Asta Eder Composites Consulting, said that China would account for 25 percent of worldwide WPC production by 2015, and roughly double its production between 2010 and 2015.

China is currently the world’s second-largest producer of WPC products, after the United States, with a little more than 20 percent of world production.

It’s a rapid increase from only about 154 million pounds of production in 2007, said Asta Eder, principal in the Vienna, Austria-based firm. The number of Chinese WPC manufacturers has grown from about 30 in 2007 to 100 now, she said.

China’s WPC market drew one foreign supplier to the conference.

Cuyahoga Falls, Ohio-based concentrate and additive maker Americhem Inc. said demand for higher-quality products in the market are creating space for the company’s weathering additives.

“It’s pretty price sensitive but it looks like we have some competitive inroads,” said Bill Podojil, vice president and general manager of the Americas for the company. “For Americhem, that is why I came here.”

That growing domestic demand will be needed, with Europe, one of China’s major WPC export markets, likely to be stagnant this year. More than half of China’s non-PVC-based WPC products are exported, with the US and Europe being large markets, although most of its PVC-based wood plastic composite products are sold within China.

Lam said some Chinese firms are exporting to Europe with no profits to keep production lines running.

Germany and northern European countries are still seeing growth in WPC demand but the economic problems in southern Europe could keep overall European demand growth in WPC at close to zero this year, said Michael Carus, managing director of Huerth, Germany-based consultancy Nova-Institut GmbH.

“In Germany we still have growth but for the whole of Europe, especially the south, we have zero growth,”’ said Carus, speaking in an interview after his presentation. European-wide WPC demand had been growing about 10 percent a year for the last several years, he said.


Comments

China’s WPC industry still growing

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: November 6, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

Hong Kong's TK eyes expansion, may buy Nypro Tool operation

September 19, 2014 2:49 pm ET

Hong Kong-based mold maker and plastics processor TK Group (Holdings) Ltd. said it's reached a tentative agreement to buy a tooling factory in...    More

Image

Foster building medical polymers plant

September 19, 2014 1:39 pm ET

Foster Delivery Science is investing $8 million in a new plant in Putnam, Conn., for production of medical polymer blends, as well as rods, film or...    More

Image

BP to restart damaged PTA unit in limited capacity by November

September 19, 2014 10:27 am ET

British Petroleum plc may restart its fire-damaged purified terephthalic acid (PTA) feedstock unit in South Carolina in late October or early...    More

Image

Bayer spinning off plastics business

September 18, 2014 8:49 am ET

Bayer AG will spin off its MaterialScience plastics group into a separate, publicly-traded company within the next 12 to 18 months.    More

Image

Investor group wants DuPont to split in two

September 18, 2014 7:37 pm ET

Investment firm Trian Fund Management LP is calling for plastics and chemicals giant DuPont Co. to split itself into two firms, one of which would inc...    More

Market Reports

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Woods economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events