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Still independent, Avian plans for growth in China and North America

By: Rebecca Kanthor
PLASTICS NEWS CHINA

July 11, 2013

Avian (Shanghai) Machinery Co. Ltd., a manufacturer of plastic granulating equipment, is nearing completion of a new plant in Shanghai and planning for growth in North America.

Mark Miao, the company's general manager, spoke to Plastics News about Avian's strategy and plans for the future at the recent Chinaplas show in Guangzhou.

The company has spent three years building its second plant, which is located behind its main plant in Shanghai. The new facility will open by the end of August or beginning of September, he said.

The original plant is 25,000 square meters and the new one will be slightly bigger, at 28,000 square meters. The plant's completion was delayed by a year due to a change in the building design, Miao said.

The company has land for a third plant near the two Shanghai plants, and Miao predicts Avian will put that land to use within 5 years.

Sales to U.S. customers are on the rise, but European orders are down, Miao said. China is still a very strong market, he said.

Last year the company produced 1,200 units overall and that number will more than double by next year, when the company plans to produce 3,000 units, he said. Currently the company's biggest markets are overseas, taking 60 percent of Avian's business. But Miao says he wants to strengthen the Chinese market and balance out the import and export ratio.

"If we can drop the price, Avian will have more customers," he said. But he later added: "I don't think price is a big problem. When a country develops [economically], the prices will increase and increase. This is normal. I think for the company you have to think of a way to make your product more high quality and more automatic and then you can cover the cost."

Avian's distribution and service center in Chicago, set up in 2010, has been doing well, Miao said. "We cooperate with many good companies," he said. "Every year we're increasing sales. This year we'll go over $10 million [in sales], I'm sure."

Looking to the future, Miao revealed that Avian will be expanding its manufacturing to the United States in the near future.

"Avian will still keep China manufacturing and will open a manufacturing plant in the U.S. to support North and South America," he said. "We'll try to produce all [of our] models in the U.S." He gave no other specifics.

Avian was founded in 1982 in Australia and in 1997 the firm transferred production to China. In 2009, the company said it was being purchased by Bredaryd, Sweden-based Rapid Granulator AB, part of IPEG Inc., a global auxiliary equipment company based in the Pittsburgh suburb of Cranberry Township.

But the deal with IPEG and Rapid later fell through — a development that Avian, Rapid and IPEG never announced. Today Miao describes the companies' relationship as a good business partnership.

IPEG CEO Chris Keller gave this statement on the situation: "The acquisition announced in June 2009 did not close. While there is no formal relationship between the parties today, there is a mutual respect for one another."

Big iron at Chinaplas

At the show, Miao showed off what he called the T-rex, which the company billed as the largest shredder in the world. The machine attracted a lot of attention from show visitors. Miao said it offers high capacity and energy savings.

"We already sold one," he said on the second day of the show, and another T-rex was sold by the end of the show.

"We make this so big recycling customers can save space, save energy, [and] save labor costs," Miao said. "One machine has huge capacity. We think there will be very big market for that."

Miao was bullish on his company's outlook. "We feel the recycling market is still strong in China," he said.