Shandong Rike eyes factory, products to fight slowdown

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: October 28, 2013 3:49 pm ET
Updated: October 28, 2013 3:52 pm ET

Related to this story

Topics Polyethylene, Materials Suppliers, China, K 2013, Business News & Features
Companies & Associations Dow Chemical Co.

DÜSSELDORF, GERMANY — Chinese additive maker Shandong Rike Chemical Co. Ltd. is hoping that a new facility making acrylic chlorinated polyethylene modifiers and other new products it launched at K 2013 can help it overcome softness in China's construction market that dented earnings in the first half of the year.

Rike opened a 50,000-metric-ton facility for making acrylonitrile modifier in Shandong province earlier this year. It was using the K fair to tout those ACMs, a new processing aid it developed for injection molded pipe fittings to replace plasticizers, and new products among its capstocks and other offerings.

Chairman Zhao Dongri said the slowdown in China's real estate sector and less lending by banks have hurt the market. Additives for PVC building materials are a big part of Rike's business.

The publicly traded company told the Shenzhen Stock Exchange in August that sales fell 5.8 percent in the first half of the year, to 484.8 million Chinese yuan ($79.4 million) and net profit dropped 48 percent, to 33.7 million yuan ($5.52 million), compared to the same period in 2012.

"The China market and the Asian market have been tough but we continue to position for growth," said Thomas Saloom, senior vice president of research and development at Rike, and an executive vice president at Performance Additives Inc., Rike's Yardley, Pa.-based partner in North America. "There has been a slowdown in the housing market in China."

Still, Rike has seen sales generally growing, from 738.8 million yuan ($121.1 million) in 2010 to 1.047 billion yuan ($171.6 million) last year.

The company said it wants to focus on innovation and continues to see opportunities in the global market as some of the large traditional players scale back.

Performance Additive President Arthur Van Nostrand noted that Dow Chemical Co., for example, had put its additives business on the selling block but then withdrew that last month, with Dow executives saying they preferred to manage it for cash. He said that creates opportunities for companies focused on innovation.

"We are very committed to the PVC market to grow and produce innovation," said Van Nostrand, adding the K show is a chance for the company to continue its globalization push in the United States and Europe.

About 30 percent of the company's products are exported, and Zhao said he's projecting more growth in exports than in China's domestic market in the near term. He said the company wants to focus on providing solutions rather than selling products.

Rike and Performance Additives have also changed their business relationship. Previously, Performance Additives had an ownership interest in Rike but it divested that, Saloom said.

He declined to offer more details, but said the two companies have signed a 15-year cooperation agreement and have strong links.


Comments

Shandong Rike eyes factory, products to fight slowdown

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: October 28, 2013 3:49 pm ET
Updated: October 28, 2013 3:52 pm ET

Post Your Comments


Back to story


More stories

Image

'Thermoforming has nearly limitless possibilities'

April 18, 2014 12:54 pm ET

Julie McAlindon of PolyOne Corp. speaks about the future of thermoforming and the integration of Spartech Corp.    More

Image

Ascend targets nylon for auto applications, opening propylene monomer unit in Texas

April 18, 2014 10:57 am ET

Materials firm Ascend Performance Materials Inc. is in full operation at its new nylon 6/6 compounding line in Florida and will break ground by the...    More

Dutch company launching $100 million PP, PE recycling plant

April 18, 2014 10:42 am ET

Quality Circular Polymers is building a new plastics recycling operation in Geleen, the Netherlands' Chemelot industrial chemical site, with a...    More

Lumena suspends trading, delays report amid claims of 'misrepresenting' financials

April 18, 2014 10:19 am ET

China Lumena New Materials Corp., which says it has the world's largest manufacturing capacity for polyphenylene sulfide resin, has suspended its...    More

PolyQuest spins off FiberQuest unit

April 18, 2014 10:14 am ET

PolyQuest Inc. has spun off its FiberQuest unit — which distributes polyester staple fibers and cotton — as a separate company.    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report provides analysis and discussions of economic and political conditions, market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as strategies being implemented by thermoformed packaging companies. In addition, there are reviews of 25 leading thermoformers in the packaging segment, assessing their growth initiatives and performance metrics over 10 years.

Learn more

Automotive Market Review and Outlook 2014 The Americas

This 75-page report features in-depth analysis of the automotive industry for the Americas. It includes discussions of market trends, legislative/regulatory activity impacting production and threats as well as design strategies being implemented by the major automakers. Detailed charts and data tables outline North American automotive production over the last five years.

Learn more

Plastics Building & Construction Market Review and Outlook 2014 with MS Excel chart data

This report provides in-depth analysis of the plastic building and construction market for North America, including discussions of trends, opportunities, threats and the latest developments in construction trends that impact plastics processors.

Learn more

Upcoming Plastics News Events

May 6, 2014 - May 8, 2014Plastics in Medical Devices 2014

May 12, 2014 - May 12, 2014Plastics News Brazil Pharma Summit

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

February 3, 2015 - February 7, 2015Plastics News Executive Forum 2015

More Events