One of the best witnesses of the boom of the Chinese plastics industry in the past few decades is Hong Kong's Adsale Exhibition Services Ltd., organizer of the ever-growing Chinaplas trade show. The following five graphs tell the story.

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Chinaplas 2012, which will take place April 18-21 in Shanghai, is expecting 200,000 square meters of exhibition area, more than 2600 exhibitors, and more than 90000 visitors.

Ningbo Haitian Drive Systems Co. Ltd., part of the Haitian Group, touted its robotic arms at the recent Chinaplas show. The company said it's in a unique position to open up the market.

Haitian Drive Systems was established in 2005, and started R&D on robots in 2007. Its portfolio currently consists of four models of the Hilectro series, covering injection molding machines with clamping forces from 35 tons to 4,000 tons.

The Hilectro series uses high-end control systems from Japan to ensure accurate position and better stability, pneumatic elements from Japanese brands of SMC and CKD, and electronic components from Germany and Japan.

The company also worked with Japan's robot maker Star Seiki Co. Ltd. to develop the larger robots.

I spoke with Huang Hao Hui, director of development, at Chinaplas. He said existing customers are mostly in the Ningbo area, but the company hopes to expand the customer base to nationwide by 2012.

"Obviously, being part of Haitian, we have better understanding of injection molding presses, applications as well as processors' mindset. That's our advantage."

The products are priced at the same level as other Chinese brands, he added. For Chinese molders that run their presses 24/7, the investment on a robot can pay back in just two years.

The world's leading PVC pipe maker JM Eagle is getting closer to announcing the details of its $400 million investment plans in China. The Los Angeles-based company also showcased its products for the first time in that country in a local construction project.

Last month, JM Eagle brought 10 shipping containers of pipes from California to Chengdu, capital of Sichuan province, and installed them in a 1,000-meter-long test road project in the New Material Industry District, according to local media reports.Company executives told the Chengdu Evening News that the HDPE corrugated pipes used in the project achieved a 20-30 percent cost reduction, compared to traditional cement pipes, as well as shortened construction time from two weeks to two to three days.

The company plans to invest $400 million on three new plants to make PVC pipes, HDPE pipes and energy-efficient steel-reinforced plastic doors, respectively.

It hopes to use the Chengdu road project, its first in China, as a model project.

JM Eagle President Walter Wang visited Chengdu in February and discussed investment options with local officials. Company officials have made comments on Chengdu having a good chance of being selected for manufacturing in different occasions.

Wang also made trips to Deqing, Zhejiang province in January as well as Luan County, Hebei province in September 2010 to evaluate investment environment there, based on various reports.

Ningbo Est Technology Co. Ltd., a maker of control systems for injection molding machines, has received a 17.5 million yuan (US$2.7 million) investment from a joint fund by Israel's Infinity Venture Capital Management and Ningbo's National Hi-Tech Industrial Development Zone.

Est was founded in 2002 with 21 employees, but it quickly grew to a market leader with 20 million yuan (US$3.1 million) in annual net profit, according to the Ningbo Evening News.

As Chinese banks tighten credit, businesses are looking for new ways to finance their growth. Last month, Zhou Dewen, chief of the Wenzhou Small and Medium Enterprises Development Association in Zhejiang Province, was quoted by Chinese media as saying that more than 40 percent of small and medium-sized enterprises could be forced out of the market by China's record-high requied reserve ratio for banks.

NatureWorks Chief Marketing Officer Peter Clydesdale spoke at a Chinaplas concurrent event last month, with news and comments on global growth strategies and plans, including in the U.S., South America, and Asia. I also interviewed him on why the company didn't pick China as the location for its second plant.

Asia plant

NatureWorks will announce details of its second global plant -- to be located in Thailand, or Malaysia, or Singapore -- "in one or two months," Clydesdale said on May 18.

There are many elements in the site selection process, he noted. "It's not a black and white, simple decision."

The primary concern with China is access to feedstocks. For the ethanol industry in China, for instance, "there have been changing decisions on how much corn will be available for industrial uses vs. food use."

Also, a lot of the potential feedstock in China would originate in Northeast China, but most plastics processing is concentrated in the South. The long distance and inefficient domestic transportation would be expensive.

Other factors for consideration include the large amount of investment required to build such a facility, access to cellulosic feedstock in the longer term, locations of the OEMs, etc.
In comparison, places like Thailand, Malaysia and Singapore will be able to supply sugar cane and tapioca-based feedstock, which will likely to be the primary feedstock for NatureWorks' PLA resin plant. Those countries also have large petrochemical industries and many downstream converters. Meanwhile, the local governments are offering incentives and strategic projects to encourage the growth of bioplastics.

The Asia plant is expected to come on line in late 2014 or early 2015.

Americas

In the U.S., the company is finalizing a 20,000 ton expansion of its 140,000-ton manufacturing facility in Blair, Neb. The additional capacity will come on stream in the next 12-18 months.

NatureWorks also is looking into recycled PLA as a reasonable sourcing option starting 2013. Later, maybe starting in 2017 for its third plant and beyond, the company hopes to have "a component of cellulosic feedstock."

The company now has agents in Brazil, Chile, Mexico and Colombia, and is looking to expand into Argentina. The Central and South America business is expected to represent 5 percent of its total sales in the next three years or so.

Global

With more than 300 licensees worldwide, Natureworks said more than 30 percent of the Ingeo biopolymer sales are from the Asia Pacific (including Japan), about 20 percent in the European Union, and close to 50 percent in North America.

Global annual sales growth rate has been "pretty much" in the 30-40 percent range since 2005, despite the global recession, the company said.

While noticing emerging competition from other bioplastics makers such as China's Hisun, Clydesdale said they can't compete with NatureWorks' scale. "I don't see the gap changing in five years."

Ingeo PLA is used in the packaging of Shiseido's Uara products for the Chinese market. (NatureWorks photo)