Cosmos Machinery points to uncertain plastics sector in China

By Steve Toloken
News Editor / International

Published: August 30, 2013 2:22 pm ET

Related to this story

Topics Machinery
Companies & Associations

Uncertainty in China’s plastics industry made for a difficult first half for Cosmos Machinery Enterprises Ltd., with revenues and demand up, but rising manufacturing costs and problems in its molding division meant the firm was unable to take advantage and it posted higher losses.

The Hong Kong-based company also replaced its chief executive officer in early July, with Tang Yu, a senior executive in its processing division, replacing Wong Yiu Ming, who the company said will remain as an executive director and handle special projects. Tang is the son of Cosmos chairman Tang To.

Cosmos said turnover increased 16 percent in the first six months of 2013, to HK$1.15 billion (US$148.2 million). Sales in its core plastics machinery business were up 17 percent, to HK$526.9 million (US$67.9 million), with that unit posting a modest profit of HK$2.3 million ($296,000).

But ongoing challenges in its plastics molding and processing factories dragged down earnings. The processing unit saw revenues rise 10 percent to HK$167.7 million ($21.6 million), but it posted a loss of HK$10.8 million ($1.4 million).

“During the reporting period, turnovers of most of the group’s businesses still recorded increases when compared to the corresponding period last year,” Cosmos said. “However, because of the difficult business environment the group faced, its consolidated profit performance was unfavorable.”

Its injection molding factory for food packaging and cutlery in Zhuhai was representative.

“Sales turnover [in Zhuhai] during the reporting period slightly increased as compared with the same period last year, which was however more than offset by the increases in the price of plastic material as well as labor cost, resulting in a decline in profit,” the company told the Hong Kong Stock Exchange in an Aug. 28 filing.

Likewise, it said its molding factory in Dongguan, which specializes in household appliances and audio/visual products, also reported difficulties, and it said the operation was being restructured and upgraded.

On the machinery side, the company said it was introducing a new generation of its energy saving SeII series of injection molding machine in the third quarter, and was working on developing an all-electric machine, its Ge series, part of a strategy to focus on higher-end markets.

“Looking into the second half of 2013, the domestic and foreign macro-economic conditions of the machinery business shall remain perplexing,” it said. “The market demand for plastic… equipment may see an increasing risk of slowdown. It is anticipated that the high-end equipment market shall suffer lesser impact.”

It noted that “vicious competition” in the plastic injection machinery market was putting pressure on prices and hurting its profit margin.

In general, it said that the consumer demand in China’s could continue to be suffer in the 2nd half of the year, and said Chinese debt levels could hurt business expansion: “Hence, small and medium customers would face financing problems.”


Comments

Cosmos Machinery points to uncertain plastics sector in China

By Steve Toloken
News Editor / International

Published: August 30, 2013 2:22 pm ET

Post Your Comments


Back to story


More stories

Image

Progress slow in setting international standards for injection presses

April 27, 2015 3:33 pm ET

ORLANDO, FLA. — The slow process of setting international standards for injection molding machines is moving forward, said VDMA, the German...    More

Image

Robots, injection molding machines create leads for Wittmann Battenfeld

April 27, 2015 3:37 pm ET

Wittmann Battenfeld Inc. of Torrington, Conn., received more than 1,600 leads at NPE 2015 worth $11 million in potential business across all business ...    More

Image

Haitian builds system for Renault's new China auto assembly plant

April 24, 2015 11:10 am ET

A late-comer to the world's largest auto market, French carmaker Renault SA is currently building its first factory in China.    More

Image

Court approves Bekum's European reorganization

April 23, 2015 5:04 pm ET

Blow molding machinery maker Bekum Maschinenfabriken GmbH has announced it received court approval for the reorganization plan it proposed in...    More

Image

3-D printing firm MakerBot closing retail shops, cutting jobs

April 23, 2015 10:33 am ET

The 3-D printing pioneer MakerBot is downsizing.    More

Market Reports

North American Thermoformed Packaging Market Outlook & Review 2015

Our annual report provides a thorough review and analysis of economic and political conditions, emerging market trends, packaging design advances, materials pricing and sustainable packaging issues impacting supply and demand in the TP segment. Our analysts identify key drivers of growth and opportunities for processors to remain competitive in the years ahead through innovation, production efficiencies and more.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

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 Wood’s 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

Upcoming Plastics News Events

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 15, 2015 - September 17, 2015Plastics Caps & Closures - September 2015

More Events