By: Steve Toloken
August 14, 2013
Asia is projected to be the largest market for passenger jets in the next two decades, accounting for one-third of world demand according to plane maker Boeing Co., and that has translated to opportunity for American plastics processor Vaupell Inc. and its China factory.
Seattle-based Vaupell has seen employment at its factory in Shenzhen triple from 60 in 2007 to 180 now, as global aircraft makers have looked for ways to boost their sales to Asian airlines.
European plane maker Airbus, for example, has a general target of 20 percent China content in its new carbon-fiber-plastic-bodied A350 jetliner.
Officials from Vaupell, which said it may be the world's largest supplier of injection molded plastic in aircraft interiors, recently sat down with Plastics News in Shenzhen to talk about how China and Asia fit into the company's plans.
The Shenzhen plant remains smaller than Vaupell's aerospace injection molding factories in Seattle, where it molded its first plastic part for Boeing in the 1940s and where plastic remains a core competency. Globally, Vaupell has 110 molding machines.
But the company has stepped up investment in China, creating a joint venture with one of its longtime mold suppliers in 2006 and transitioning that factory from strictly mold making to manufacturing and injection molding, with 18 presses currently.
Syd Stapleton, Vaupell's vice president of Asia and Europe, said Shenzhen does all the injection molding, assembly and painting for the window assemblies on the A350, and then ships them to Europe.
Also, he said Vaupell Shenzhen is the only factory outside the United States on Boeing's QPL, or qualified producers list, for plastic parts.
The company had sourced molds in Asia for a long time before starting the China joint venture, a Hong Kong-based company called Rong Feng HK Industries Limited, because it felt a local operation would help win business in growing local markets, he said.
"We are seeing increased interest in the commercial aircraft industry in making sales into China," he said. "It's projected to be the largest market for airlines in the world in the next 20 years, so everybody wants to say our plane was at least partly made in China."
A walk through the Shenzhen factory, known as Rong Chang Sheng Plastic Mould Co. Ltd., does not at first glance reveal anything that looks very different from many other Chinese molding factories.
But weaving his way around the workshop, Stapleton said a lot of experience is needed to work with expensive resins like polyetherketoneketone or glass-filled polycarbonate to meet fire-resistance, performance, appearance and weight-reduction demands of commercial airliners.
"You are right on the edge of degrading this material to get it to mold; it's tricky and expensive," he said. "If you screw up and waste a bunch of material you've just obliterated the profits for that month."
Stapleton pointed out a range of parts coming out of the 18 Chinese-built Haitian molding machines on the shop floor, from interior trim pieces, window assemblies, decompression grilles for passenger cabins and sleeves used to protect cables from lightning strikes.
The Shenzhen operation mainly does manufacturing, with much of the company's R&D remaining in the United States, where its engineers have decades of aerospace experience, Stapleton said.
But the China operation has contributed mold-design expertise, playing a key part in developing a complex mold for a Boeing 737 window piece that streamlined manufacturing by taking three separate plastic parts and making them into a single part, Stapleton said. It helped Vaupell get that business from a competitor, he said.
Globally, Vaupell supplies all Boeing aircraft with complete window assemblies, which include the shade, frame and interior window that passengers can touch, but not the outside structural window.
The company is also hoping the Shenzhen facility can help it win contracts with China's emerging home-grown aircraft manufacturing industry.
Shenzhen currently makes the window assemblies for the ARJ21, a Chinese-built regional jet that the country wants to sell on the global market. Vaupell hopes to do work for the C919, a Chinese-developed, narrow-body jetliner designed to compete with the 737 and Airbus A320.
Stapleton said the Chinese companies developing those planes are using many of the same global suppliers that Boeing and Airbus use.
"We have basically been finding that Chinese aerospace companies have been going to some of the traditional suppliers in the industry to get interior parts," he said. "The intention for the both ARJ21 and C919 is to have them fly in the international market. ... Meeting those requirements is not easy. It requires knowledge and experience and understanding of unusual materials."
All of the global aerospace-compliant plastic materials, for example, have to be imported to China, Stapleton said.
While the aircraft-making market is booming — Boeing said last year was an all-time record for deliveries and orders for the 737 — Stapleton said the industry is increasingly adapting a business model like the automakers.
"Everybody has this feeling that airplanes are expensive so you must have big margins in the aerospace industry," he said. "It's really not true. It's increasingly operating on the automotive model, of providing your profits by squeezing your suppliers."
Stapleton said it's possible the company could expand more in China, but there are no firm plans. At the moment, Vaupell wants to make the China operations more efficient, to cope with rapidly rising wages that are eroding cost advantages.
"There are certainly serious pressures for us to pay attention to our costs and to begin to be as efficient as a German company," he said. "People make money in Germany doing molding because they're extremely efficient, and increasingly that's becoming an important factor in China."