Cosmos, in bid to regain footing, says sales up sharply in 2017

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Kent Miller Freeman Tang, Cosmos Machinery CEO, says sales have been strong in the first months of 2017.

Guangzhou, China —​ After a few rocky years, injection molding machine maker and plastics processor Cosmos Machinery Enterprises Ltd. is reporting strong sales growth in the first four months of 2017.

Sales were up nearly 30 percent over the previous year's period, said CEO and Executive Director Freeman Tang. Sales could have been higher, too, except for "supply chain hiccups," including Beijing moving aggressively to shutter polluting suppliers, Tang said.

In an interview at Chinaplas, Tang pointed out a J-series two-platen machine. Tang credits the maturation of the J-series, which had "teething problems" early on but has shown increasing strength.

"Our two-platen systems have been one of our bright spots in the last few years," he said.

Cosmos also demonstrated a hybrid system — "the clamping side is hydraulic, while the injection side is fully electric" — aimed at the high-end electronic components industry.

Both machines are sold under the company's Welltec brand name.

Tang also touted the company's Industry 4.0 software, dubbed iSee, a cross-platform cloud-based system that links up with a user's manufacturing executing system, or MES.

Launched in 2011, Cosmos said iSee has been implemented by major mainland manufacturers, including Haier Group Corp., Semk Electronics (Huizhou) Co. Ltd. and Sichuan Kelun Pharmaceutical Co. Ltd.

Like many equipment makers, Cosmos is partnering with robot and other vendors to deliver turnkey systems. The CEO also reckons China's hypercompetitive injection molding machine sector has seen a shakeout in recent years of smaller players.

Adding wind to Cosmos's sails were some better-than-expected economic growth figures, especially in key industries.

Cosmos targets its two-platen machines at the country's booming automotive sector, while infrastructure upgrades drive sales of Cosmos's PVC machines, which appeal to manufacturers of pipe fittings, Tang said. Other key markets are packaging, electronics and medical.

The CEO opened up about the Hong Kong-based company's stumbles in recent years, including faulty servo motors.

"Honestly, about four or five years ago, we were hit by some significant quality problems," Tang said. "That hurt us big time."

"We did many changes to eliminate the problem. But it takes time to restore confidence to our customers. But most importantly, we need our sales people to believe and buy in," Tang said.

Cosmos relies extensively on in-house sales staff, rather than outside agents. "That's the only way to have a really firm grip on after-sales service," Tang said.

Recently the company completed a manufacturing reorganization. The company's Dongguan plant, which has a beefier technical team, now specializes in custom and industry-specific machines, while the Wuxi plant focuses on standardized machines. Total factory staffing is about 800.

Cosmos's sales for 2016 were HK$2.19 billion ($281 million), an 8.5 percent decline from the previous year. The vast bulk of sales — 89 percent — were to Hong Kong and mainland China.

Plastics machinery represented about a third of the company's sales. The diversified company — it also manufactures extrusion machinery, rubber injection molding machines and plastics goods — was hit especially hard by a decline in sales of printed circuit boards.

Last year, the company shuttered a unit that made CNC machinery.

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