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Demag to boost capacity in China

By: Steve Toloken

August 8, 2013

Germany's Demag Plastics Machinery (Ningbo) Co. Ltd. plans to invest at least 7 million euros ($9.35 million) in a significant expansion of its injection press factory in China.

Demag, a unit of Japanese-German press maker Sumitomo Demag Plastics Machinery GmbH, said the expansion of its existing capacity in Ningbo will give it capacity of between 1,000 and 3,000 machines a year there, and expand the tonnage range produced.

It's expected to open in 2015, and is designed to boost Demag's share of the Chinese market, the largest IMM market in the world, as well as increase exports, according to Stephan Greif, CEO of Demag Plastics Machinery Ningbo.

Demag today produces its Systec series of hydraulic machines with clamping forces of 50 to 1,000 tonnes in Ningbo, but Greif said the expansion opens up the possibility of making other machines in Demag's portfolio.

He declined to specify which ones, saying it was still under discussion.

While China's overall plastics machinery market dropped 3.5 percent in 2012, to $7.92 billion, it was a record year for sales and profits for Demag's Ningbo operation, Greif said.

As manufacturing and labor costs rise in China, molders are buying better equipment to remain competitive, and that's proving a boon to foreign brands and upper-end local companies, Greif said.

Demag currently makes about 650 machines a year in Ningbo. Greif also said the factory has become more of an export center in the last five years, with 25 percent of its production exported, mainly to Southeast Asia, the Middle East and Brazil.

Less than 5 percent of its production was exported in 2010, by comparison, and the company has a target of exporting one-third of its Ningbo made machines, he said.