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Davis-Standard planning for growth in China

By: Rebecca Kanthor
PLASTICS NEWS CHINA

May 19, 2013

GUANGZHOU, CHINA -- American extrusion and converting technology systems manufacturer Davis-Standard LLC is eying Asia and specifically China as its new second home, in a drive to become a more global company.

"We're committed to expanding our footprint out here," said President and CEO Bob Preston in May 19 news conference in advance of Chinaplas in Guangzhou. "We're not just going to expand our manufacturing footprint, we're going to expand our capabilities in the area of service, after-market and technical support," he added.

Preston and Bob Florence, executive vice president, global sales and marketing, both referred to their previous professional experience in China.

Currently 30 percent of Davis-Standard's business is in Asia-Pacific, Preston said. The company has one manufacturing plant in the region, a 46,300-square-foot factory in Suzhou that opened in 2012.

"We're using Suzhou primarily as a component plant," Preston said, but the company intends to add to its capabilities there. Davis-Standard plans to make its Super Blue and Euro Blue extruders in Suzhou for customers in China and the Asia Pacific, as well as the dsX flex-pack.

The company expects the Suzhou plant to expand to include to research and development by fall of 2014.

But Davis-Standard is already looking ahead.

"We think probably at the end of 2014 we'll probably have outgrown it, and we'll probably have to double the size of it and find another facility," Preston said.

Fred Pereira, the company's president for the Asia-Pacific, said Davis-Standard is considering several options, including expanding in Suzhou or another location in China. He said getting closer to where the raw materials are sourced could drive the decision.

"That would be one of the criteria of selecting a site," he said. "Availability of raw materials, availability of talent, how easy it is to retain people." But he added, "From an ease of management standpoint, something just next door to our [current] site would be ideal."

Preston reiterated that the decision to expand in China is in line with the company's hope to capture more of the China market.

"Ideally we want to produce a machine that [if it] is sold in China, we want to produce it in China," he said.

Bob Florence, executive vice president for global sales and marketing, made the company's goals in the region clear: "I'm looking at doubling our business in Asia Pacific and in China over the next year. It's a pretty aggressive target and I think we can get there," he said. "We think there's great potential here."