PN China Blog - English: Machinery Archives

So far so good for press makers

Strong performance released July 17 by Chen Hsong Holdings Ltd. injected momentum of the press giants stock price on the Hong Kong Stock Exchange (0057.HK).

The company said fiscal year 2006, which ended March 31, 2007, saw sales up 10 percent and profits up 15 percent.

According to the ET Net, who claims to the largest financial news provider, Chen Hsong cited oil pricing a major factor for its sales. Sales only grew 8 percent in the first half due to high oil prices but went up 14 percent in the second half as oil prices dropped, the company said.

Chen Hsong stock hit a 52-week high on July 18, the following trading day.

The upbeat trend in 2007 is also found on the stocks of Haitian International Holdings Ltd. and Cosmo Machinery Enterprises Ltd., the other two largest press makers in China.

In the following chart compiled with Yahoo Finance, the blue line is Chen Hsong, green Haitian and red Cosmo. For a better view of the chart, click to open a larger version in a new window.

Posted by Nina Ying Sun on August 8, 2007 11:15 AM | Permalink | Comments (0)

Who wants to keep Chinese presses out of India?

For background information, read PN's fresh report India probes allegation of China injection press dumping.

It's not the first trade dispute between the two of world's fastest-growing economies, but the anti-dumping investigation India's Ministry of Commerce is starting on Chinese injection presses is quite interesting and may have significant fall-out.

In the official notification, the Indian government not only mentioned the applicant L&T Demag Plastic Machinery Ltd. of Chennai, but also specifically noted that "there are three other companies which are known to have the capacities to produce the subject goods in India: Ferromatik Milacron India Ltd. of Ahmedabad, Windsor Machines Ltd. of Thane and Electronica Machine Tools Ltd. of Pune."

Maybe the government believed that these three companies -- all non-applicants -- are major domestic players in the field. But note the significant foreign ownership in these enterprises. L&T Demag and Ferromatik Milacron India are foreign-invested, and Windsor used to be foreign-invested. The only local company, Electronica, makes just 100 machines of its own per year, and imports 400 presses from China's Haitian Group.

Machinery industry sources said that the biggest Chinese brands sold in India appear to be Ningbo Haitian Group Ltd. of Ningbo; Zhejiang Sound Machinery Manufacture Co. Ltd. in Hangzhou, Zhejiang province; and Chen Hsong Group of Hong Kong.

At least two of the big three, Haitian and Sound, already have assembly facilities in India. So if penalties were imposed to whole presses, Haitian and Sound could ship parts to India and assemble machines locally. Other companies can certainly follow the suit.

Of course, jobs and investment will come with the assembly work from China to India. India wouldn't mind that.

The probe could also have an impact on Chinese participation in the big PlastIndia show, coming up Feb. 4-9, 2009, in New Delhi, according to an Indian source who talked to one of our reporters. And the two countries currently plan to organize an India-China Plastics Summit in conjunction with that show. This move could add a new dynamic to those proceedings.

I'm having a hard time immediately finding how many Chinese exhibitors participated in the last PlastIndia show, in 2006. But I've not been impressed with the Indian presence at Chinaplas -- Asia's largest plastics show. There were only six Indian exhibitors at Chinaplas earlier this year, down from nine in 2007.

We'll watch it closely and keep you updated.

Posted by Nina Ying Sun on July 11, 2008 5:59 PM | Permalink | Comments (0)

No pink slips, just voluntary pay cuts

China's largest injection press maker, Ningbo Haitian Group Ltd., had the perfect opportunity to let go of more than 200 workers whose contracts just expired. Especially since, as a result of the global recession, Haitian's output plummeted 70 percent in November and December. It would have been a good time to reduce headcount, seeing as a whopping 70 percent of the firm's 3,500 employees didn't even have any work to do.

"Not renewing the contracts could have saved the company millions of yuan," General Manager Zhang Jianming told Zhejiang Daily, "but it's so hard to find a new job right now that these workers may face real life hardship."

So Haitian went ahead and renewed the contracts. Each employee has work to do for at least one week every month, and the rest of the time is paid time off.

The workers expressed their gratitude for no pink slips by volunteering pay cuts, and product development and sales staffers worked long hours and on the weekend. Now, it looks like the efforts are paying off. The company said it secured 10 million yuan in domestic orders the first week of the New Year.

Nothing wins Chinese employees' hearts and loyalty more than job security, especially right before the Chinese lunar New Year holiday. How long will Haitian be willing and able to afford employees working one week every month? Will sales turn around after the lunar New Year, as the company forecasts? We will keep a close eye on it.

Posted by Nina Ying Sun on January 14, 2009 11:55 AM | Permalink | Comments (0)

German firms to expand in China

Despite the major slowdown of China's gross domestic product growth rate, which dropped to 6.8 percent in the fourth quarter of 2008, foreign investors continues to expand in the world's third largest economy, including German conglomerates Evonik Degussa GmbH and Siemens AG.

Chemicals giant Evonik Degussa was reported by Chinese state media to have reached an agreement with officials of Hangzhou, capital city of the Zhejiang province, on issues regarding investment policies, investment scale, environmental protection requirements, etc.

During a business visit to Hangzhou in January, Evonik Degussa (China) Investment Co. Ltd. Vice President Tuo Jianliang told the press that he was very optimistic about the industrial policies in Hangzhou and planned to invest 24 million euros. The investment will aim to supply a number of sectors including construction, automotive, food and agriculture. The company said it will add 100 million euros of investment per year in the next four years.

Evonik Degussa currently has established legal entities in 13 cities on mainland China, including Beijing, Shanghai, Guangzhou, Changchun, Dalian, Liaoyang, Yingkou, Qingdao, Rizhao, Anqiu, Nanping, Nanning and Chongqing.

Siemens AG is in talks with the local government in Foshan, Guangdong province, regarding potential further investment. According to a report from Zhujiang Business, Siemens China's Executive Vice President He Weike told city officials that the company is confident about increasing its investment in Foshan and hopes for strong support from the government. Among other industries, He said Siemens hopes to help upgrade the plastics machinery industry in Foshan, where Siemens currently runs a sales office.

It appears that the Siemens expansion deal is still in a very early stage.

Posted by Nina Ying Sun on February 2, 2009 9:30 PM | Permalink | Comments (0)

India releases initial anti-dumping charges on Chinese presses

As Plastics News has reported, Indian and Chinese officials and businesses exchanged friendly words on bilateral trade and cooperation at the recent PlastIndia event. However, the day after the trade fair, Indian authorities announced the initial findings of their anti-dumping probe into Chinese plastics equipment, including lofty punitive duty rates.

According to the February 10 notification posted by the Indian government, a 223 percent duty rate will be imposed to "plastic processing or injection molding machines" in the range of 40-1,000 metric tons that originate in or are exported from China.

A total of 10 Chinese machinery suppliers tried to rebut the anti-dumping presumption and responded to investigation questionnaires, which focused on cost structures and market-economy examination. These companies have received duty rates from 76 percent to 223 percent. They are:

Guanzhou Borch Machinery Co. Ltd. (76 percent)

Ningbo Liguang Machinery Co. Ltd. (95 percent)

Ningbo Haitian Huayuan Machinery Co. Ltd. (100 percent)

Ningbo Haitian Plastic Machinery Group (100 percent)

Ningbo Haixing Plastics Machinery Mfg. Co. Ltd. (123 percent)

Hangzhou Tederic Machinery Co. Ltd. (126 percent)

Haitian Heavywork Machinery Co. Ltd. (128 percent)

Zhejiang Golden Eagle Plastics Machinery Co. Ltd. (147 percent)

Zhejiang Sound Machinery Manufacture Co. Ltd. (163 percent)

Smargon Plastic Machinery Co. Ltd. (223 percent)

The case is still open, as the Indian government said it would conduct further verification and hold hearings before announcing final findings. Feedback to the initial findings is due 40 days from the notification. No other timetable has been given.

Posted by Nina Ying Sun on March 3, 2009 11:44 AM | Permalink | Comments (54)

Indian group supports Chinese presses

Vicky Parwani, treasurer of the Association of Furniture Manufacturers & Traders (India), shared with me a letter sent by the association to India's Directorate General of Anti-dumping & Allied Duties under the Ministry of Commerce & Industry.

In the letter, the association opposed Indian government's preliminary anti-dumping charges on Chinese injection molding machines. "The association strongly condemns such as move that will destabilize the plastic furniture industry," the letter said.

Parwani is also a partner of Mumbai-based molder Exclusiff Seating Systems.

Posted by Nina Ying Sun on March 25, 2009 1:29 PM | Permalink | Comments (2)

L&T Demag's anti-dumping eligibility in doubt

The sole applicant for India's anti-dumping investigation on Chinese plastics injection molding machinery may have inflated its market-share data in order to qualify for filing the complaint, according to an Indian machinery executive. He pointed out that the Indian government requires the applicant for an anti-dumping probe to have at least 25 percent of domestic market share.

K. Bhattacharya, partner of Kolkata, India-based plastic machinery manufacturer Protech Engineering, told Plastics News that L&T Demag makes 400 machines annually, while stats compiled by Indian plastic resins giant Reliance Industries Ltd. show that more than 3,000 injection presses were sold in India in the 2007-08 fiscal year.

Bhattacharya provided us with machinery sales statistics for 2005-06, 2006-07, and 2007-08 (click year to open in new window). The stats include both locally made machines and imports, and Bhattacharya said his team is working on collecting more specific information about India's indigenous machine building capacity.

"All three leading machine manufacturers -- namely, L&T Demag, Windsor Machinery & Milacron India -- put together make only 1,100 machines," which is barely a third of the total market share. "India's plastic processing industry will get affected badly in case machines from China get blocked this way," Bhattacharya asserts. "Can China afford to lose this big business?" he added.

Posted by Nina Ying Sun on March 26, 2009 4:31 PM | Permalink | Comments (15)

China's stimulus plan shows benefits

Thanks to globalization, one nation's fiscal spending to stimulate economic growth is bound to "leak out" to the entire global supply chain. For example, China's move to subsidize big-ticket item purchases - such as appliances, cars and electronics - in rural areas is bolstering sales for Japanese and Taiwanese suppliers, among others.

Chinese financial media CBN cited a report from Nihon Keizai Shimbun saying that Japanese material suppliers, including Mitsubishi Chemical Corp., have raised their ethylene capacity utilization rates to 75-90 percent. The report attributed the change to China's growing demand as well as the ending of the industry's inventory adjustment.

Taiwan Union Plastic Machinery Co. Ltd. also reported 10-15 percent sales growth in the first quarter, when the company said it sold more than a dozen large injection molding machines (with clamping forces of more than 1,600 metric tons). The company's 2008 sales contracted 5-10 percent, according to a news story from Xinhua News Agency. "We didn't expect to see the effects [of the stimulus package] so soon," a company official said, "We believe the growth rate will reach 20 percent for 2009 fiscal year."

Posted by Nina Ying Sun on April 16, 2009 11:45 AM | Permalink | Comments (2)

Now that mainland China can invest in Taiwan

Starting this month, Taiwan is allowing for the first time in six decades direct investment from mainland China to 64 sectors of manufacturing, 25 in services and 11 public infrastructure projects. The plastics industry is included in the list.

A little background: Taiwan has restricted business activities with mainland China since the two sides split at the end of a civil war in 1949. However, since the mainland opened up for Taiwanese investment two decades ago, the amount of Taiwanese investment on the mainland has reached US$77 billion according to official records. Now appears to be the time to balance that flow of money.

But, given China's undisputable advantages in manufacturing, what types of investment opportunities would be able to attract mainland Chinese businesses to invest in Taiwan's plastic manufacturing industry?

When I raised this question to a panel of Taiwanese trade officials at a cross-strait forum in Guangzhou before this year's Chinaplas show, the answer was: "While Taiwanese firms have gained tremendous knowledge of the mainland during the past two decades, the mainland businesses know little about Taiwan's plastic industry and market. In order for them to discover investment opportunities, the first step should be send trade missions to Taiwan for first-hand intelligence."

It doesn't take a trade mission to realize that, compared to mainland China, Taiwan's plastics industry doesn't offer competitive advantages in labor cost, scale of economy, readiness of entire supply chain, local market potential or government incentives/subsidies.

In my opinion, Taiwan's strengths that mainland China hopes to take advantage of lie in the fields of design, high-tech manufacturing and global trade.

When it comes to plastics manufacturing, the most convenient example would be India's antidumping charges on Chinese injection machines. The trade barrier doesn't apply on machines made in Taiwan. Perhaps mainland press makers can start assembling presses in Taiwan and ship them through the South China Sea to India?

I also believe that Taiwan has plenty of reasons to want to work with the mainland, which accounts for more than one-fifth of Taiwan's total foreign trade volume. As Mr. Huang Wenrong with the Taipei World Trade Center put it at the cross-strait conference, buyers from all over the world are doing one-stop shopping in mainland China, threatening regional shows like Taipei Plas. Meantime, Huang said, Taiwan can contribute with its experience in dealing with global downturns, which China lacks.

Posted by Nina Ying Sun on July 10, 2009 12:03 PM | Permalink | Comments (0)

China's new policies on CD/DVD equipment

On this coming Saturday, August 1, 2009, China's new regulations on media reproduction will take effect. Compared to the previous version (enacted in 1996), the new regulatory policy is tightening the control of media reproduction equipment, including high-precision injection molding machines.

Under the new law, a government approval must be in place for any purchase, import, addition or modification of media storage disc manufacturing equipment. The General Administration of Press and Publication (GAPP) is the administrative agency responsible for drafting and enforcing the regulations.

It's worth noting that GAPP is actually the same agency as the National Copyright Administration (NCAC), which is typical China's "one agency, two nameplates" structure.

According to the new regulations, the purchase, import, addition or modification of manufacturing equipment for read-only CD/DVDs must apply for approval from GAPP in Beijing. GAPP's provincial level branches will be regulating the purchase, import, addition or modification of manufacturing equipment for writable CD/DVDs.

Equipment manufacturers in China are required to report the production and sale of any CD/DVD reproduction equipment within 30 days.

It'll be interesting to see whether this new regulation will be strictly enforced and whether it will in any way affect the high-precision injection press market.

(The GAPP Web site is currently down. I'll post the URL of the new law once the site is back online.)

Posted by Nina Ying Sun on July 29, 2009 8:50 PM | Permalink | Comments (0)

Demag China said 2009 was like bungee jumping

Stephan Greif, Demag Vice President-China and CEO of Demag Ningbo, compared the year of 2009 with the experience of bungee jumping. "The first six months was free fall and the second six months was booming," he wrote in the company's latest monthly newsletter.

Although the overall annual performance ended up being "quite normal," it took some extraordinary effort to make it happen. Greif said it wasn't easy to balance production capacity, inventory and cash flow.

He said Demag Ningbo strengthened its capacity in the past year and is launching four new machine models (420-ton, 500-ton, 650-ton, and 800-ton) in 2010, the Year of Tiger.

Greif also emphasized that low-end production will soon come to an end in China, after discovering that the average salary in Southeast Asia is lower than China. "Medium and high-tech products are the future!" he noted.

After reading Greif's note, I fully agree that China's cost hike will continue, especially as experts warning about inflation crawling up in 2010. Meantime, pressure from the outside for China to inflate its currency also keeps intensifying. All these factors will inevitably lessen China's cost advantage, compared to other developing countries.

On the flip side, it could also mean that Chinese consumers and businesses now have stronger purchasing power to shop for higher-end products. Obviously, this growing market section is sought after by both multinational firms and relatively more advanced local manufacturers. Therefore, the potential is growing, so is the competition.

Posted by Nina Ying Sun on January 21, 2010 12:30 PM | Permalink | Comments (1)

India confirms press antidumping

At last, India's government imposed definitive anti-dumping on imports of injection molding machines with clamping forces no less than 40 metric tons. The announcement came out in late March, confirming that the antidumping duty started on May 12, 2009, the date on which the provisional anti-dumping duty was imposed and will end on May 11, 2014.

India started the probe in July 2008, started levying antidumping duty in May 2009, and announced final decision in December 2010. The 10 companies that responded to the investigation are charged duty rates in the range of 60-174 percent. All other Chinese companies face a universal rate of 174 percent.

In the past two years, Plastics News has been following this issue in these stories and blog posts:

India moving ahead on China press-dumping complaint

India's duties on Chinese presses spur controversy

L&T Demag's anti-dumping eligibility in doubt

Indian group supports Chinese presses

India releases initial anti-dumping charges on Chinese presses

Who wants to keep Chinese presses out of India?

Posted by Nina Ying Sun on April 6, 2010 2:41 PM | Permalink | Comments (1)

Beneficiaries of India's antidumping against Chinese presses

Chinese press makers could do nothing but regret India's decision to impose antidumping duties on injection molding machines from China since last May. But the question is how their market share in that country has been replaced.

Apparently, Taiwanese machinery firms are among those who benefit from this policy. Taiwan's Chuan Lih Fa Machinery Works Co. Ltd. saw its market share rise in India in 2009, which helped the company hold its overall sales during the crisis.

Other major injection press exporters, such as Japan and Germany, probably have benefited as well, although I haven't found solid stats to back up the theory. Maybe presses from these countries are in a price range that don't directly compete with Indian or Chinese machines.

I'm most curious about whether Indian local press makers have found the antidumping action useful or valuable.

The only company that actively called for the antidumping probe was L&T Demag Plastic Machinery Ltd. of Chennai, although the government also mentioned three non-applicant companies -- Ferromatik Milacron India Ltd., Windsor Machines Ltd. and Electronica Machine Tools Ltd. -- when trying to justify the action.

The ownership structure of L&T Demag Plastic Machinery Ltd. changed on March 31, 2009. Larsen & Toubro Ltd. bought out joint venture partner Sumitomo (SHI) Demag Plastics Machinery GmbH's share and made the operation a wholly owned entity: L&T Plastics Machinery Ltd.

I imagine that L&T is a poster child of India's fast growing manufacturing sector. For instance, the Mumbai-based conglomerate helped build India's first nuclear powered submarine, which launched in July.

L&T chairman A.M. Naik was quoted in a Machinist article as saying, "Over the last four decades, L&T has played a crucial pioneering role in building India's strategic sectors by successfully executing several technology-intensive and challenging projects." Mr. Naik himself made BusinessWeek's "India's 50 most powerful people 2009."

L&T Plastics Machinery Ltd. claims production capacity exceeds 1,000 machines per year, according to its Web site.

Posted by Nina Ying Sun on April 30, 2010 11:15 AM | Permalink | Comments (0)

What a year for press makers

2010 has become a year of growth for global manufacturers -- large and small -- of injection molding machines. Here is a case study of a Chinese firm that's probably less than well-known to many of their Western peers.

Ningbo Haixing Plastic Machinery Manufacturing Co. Ltd., featured in a recent article in the Zhejiang Merchant magazine, is seeing its best days in history. General manager Chen Xingliang put it this way: "I've been making a living in the plastic machinery industry for 41 years, to be honest, the company has never been doing as well as this year, better than anytime in the past."

Orders have accumulated to 300 million yuan (US$45 million), and the company expects the per-capita-revenue to reach 1.5 million yuan (US$225,225). The factory is running 24/7, and overtime work has become a routine for employees - probably not to their dismay.

In fact, the biggest concern for Chen is the lack of workers.

"We could have picked up 500 million yuan (US$75 million) worth of orders, but I didn't dare to," he said.

During the financial crisis, the company laid off many apprentices who were in the middle of three- or five-year training programs.

Then, the market rebounded with such rapid speed that the company couldn't adjust fast enough, in terms of workforce and supply chain.

It has hired 70 workers this year and has a total of 250. The enforcement of labor laws has made the management of overtime more difficult, Chen said. "If one person refuses to work overtime, the other 249 won't be able to work either."

In addition to having employees sign "voluntary overtime agreements", Haixing has raised its overtime pay rate and offers one day off per week.
On top of the labor shortage, Chen's concern with the uncertainty future prevents him from launching a sizable expansion.

Haixing reported 170 million yuan (US$26 million) of sales last year. The per-capita-revenue - a pretty telling measure - was 800,000 yuan (US$120,120).

Another major change undergone at Haixing is the switch to domestic customers. The company said the strengthing yuan cost it nearly one million yuan (US$150,150) in the first half. Combined with lessons learned from the global crisis, Chen said they realized that export markets are not as reliable as domestic. The domestic-export ratio currently sits at 2:1.

Posted by Nina Ying Sun on November 5, 2010 5:09 PM | Permalink | Comments (0)

Fanuc launches new Shanghai factory

Industrial robot manufacturer Shanghai-Fanuc Robotics Co. Ltd. has launched a new plant in Shanghai's Baoshan district. Fanuc claims to be the only company that uses robots to make robots.

The new plant sits on a campus of 37,900 square meters and touts an investment of US$16.8 million.

Construction started in November 2009 [as we reported here], and was completed by November 2010.

The Sino-Japanese JV said the new facility has designed annual capacity to make 3,800 sets of robot systems, 1,400 injection molding machines as well as CNC machines.

Annual sales are forecasted to reach 1 billion yuan (US$151 million).

SGM-Dongyue Auto, a joint venture unit of Shanghai General Motors, announced plans to purchase 250 robots at Fanuc's opening ceremony last month.

Posted by Nina Ying Sun on January 6, 2011 5:10 PM | Permalink | Comments (0)

Chinese-style vacation perks

Just like how Americans go cruising in the Caribbean in the winter, the Chinese flock to the southernmost province in the country, Hainan province. Among them, 1,000+ are employees of injection press giant Haitian Group.

Haitian is spending more than 10 million yuan (US$1.5 million) on company-sponsored, all-inclusive vacation packages for its 6,000 workers, according to the Zhejiang Daily.

Employees and their families are able to choose from six popular tourism destinations in the country. The company flew the first group to Hainan Island, the hottest pick, for a 6-day vacation in two chartered planes on January 5.

Haitian's annual output topped 10 billion yuan (US$1.5 billion) in 2010, the report said. Despite busy production schedules, executives decided to reward the staff for their hard work in the past year with group vacations around the upcoming Chinese New Year/Spring Festival, which starts Feb 3 this year.

That reminds me of the type of all-inclusive, stress-free family vacations my parents' companies used to organize. I always tagged along and had fun playing with all the other children whose parents worked with my parents.

I used to think it was a benefit exclusive to state-owned enterprises and government employees in the old days. But it's more of a Chinese cultural event. Nowadays, privately owned companies and even foreign-invested firms continue to organize these group retreats, where you and your family go site-seeing with all your coworkers and their families.

The time spent together during those trips made me so familiar with some of the families that many years later, I still remember trivial things such as Amy didn't like to brush teeth in the morning, so to speak.

As attractive as an employer-paid vacation sounds, somehow, it's a little hard for me to picture the family-friendly week-long group tour in the American corporate setting. Would you go if offered?

Posted by Nina Ying Sun on January 7, 2011 3:14 PM | Permalink | Comments (0)

"Best year" for China's machinery makers

While emerging markets like China fueled the recovery and growth for Western plastics machinery makers in 2010, their Chinese counterparts also claimed an unprecedentedly successful year.

Latest stats show that the output of the Chinese plastics machinery industry reached 30 billion yuan () in the first three quarters of 2010, up 73 percent from a year ago. During the same period, the overall industrial machinery industry in China only grew 35 percent.

In fact, 2010 is the best year in history for plastics machinery, according to Su Dongping, general secretary of the China Plastics Machinery Industry Association. She was quoted in China Industry News.

In the meantime, China has greatly reduced its dependency on imported high-end plastics equipment. Imported plastics machinery accounted for more than 50 percent of China's market in 2008, Su said, but that percentage has dropped to 29 percent in the first three quarters of 2010.

Take injection molding machines for auto parts as an example. Su said Chinese auto suppliers used to import machines from Japan. In 2009, Japan exported 2,000 mid-to-large tonnage presses to China, 80 percent of which for the auto industry. But the situation is changing, Su noted, as upgraded Chinese machines rapidly replace the share of imported machines.

The report didn't specify on the role of plastics machines assembled by Japanese and Western transplants in China, which could a factor in the reduction of imported machines.

Posted by Nina Ying Sun on January 10, 2011 5:22 PM | Permalink | Comments (0)

China is a net importer of plastic machinery

Despite its reputation for price-competitive machines in the global market, China runs a nearly US$1 billion trade deficit in plastic machinery.

The truth is that China exports a significantly larger number of machines than it imports. However, the advantage in quantity is outweighed by the factor of low prices.

During the past year, China imported 15,000 units of plastic machinery, worth US$2 billion. Exports reached 44,000 units valued at US$1.1 billion.

Japan, Germany and Taiwan are ranked the top three countries/regions that China buys plastic machinery from, representing 80 percent of China's imports.

China's major export destinations include Brazil, Iran, India, Turkey, Indonesia, Vietnam and Thailand.

While India continued to impose anti-dumping duties on Chinese injection molding machines in 2010, China still managed to grow its global export of injection presses by more than 70 percent to 19,000 units valued at US$600 million.

Injection presses account for about half of China's plastic machinery import and export.

(Source: China Customs)

Posted by Nina Ying Sun on March 2, 2011 11:58 AM | Permalink | Comments (0)

12th five-year plan: Plastics machinery

Beijing-based China Plastics Machinery Industry Association outlined industry growth targets as well as areas of focus in its 12th five-year development report.

CPMIA expects the industry to grow at least 12 percent annually and reach 50 billion yuan (US$7.6 billion) in total sales by 2015, reported the Shanghai Securities.

In the meantime, CPMIA hopes to raise domestic machinery makers' share in the Chinese market from 72 percent to around 80 percent.

The trade group also aims to help industry players develop higher-value-added products and achieve 10 billion yuan (US$1.5 billion) in exports by 2015.

CPMIA said it would lobby for more government support to grow and upgrade the plastics machinery industry, specifically in areas including high-precision machinery, energy-efficient machinery, etc.

Earlier this week, China's top political advisor Jia Qinglin called for more efforts to push forward the development of the country's machinery industry. According to a Xinhua report, he gave a number of highlights, including:

1. Raise quality and efficiency;
2. Accelerate mergers and acquisitions to forge conglomerates;
3. Enhance the industry's ability to withstand risk;
4. Improve technological innovation and expand scientific research input;
5. Eliminate outdated production capacity;
6. Increase energy-saving and emission-reduction activities; and
7. Strengthen international competitiveness, among others.

China's plastics machinery industry is a grassroots industry, consisting of mostly privately owned companies, CPMIA official Su Dongping told the China Industry News. She said the industry has a strong leverage effect with China's plastics processing industry, which makes 1.5 trillion yuan (US$229 billion) in annual output.

In 2010, China's market demand for plastics machinery rose to 47.9 billion yuan, nearly 40 percent higher than in 2008.

CPMIA's survey shows a total of 564 plastics machinery manufacturers with 2010 sales of 5 million yuan (USD$764,059) or higher. Among them, 10 firms topped 500 million yuan (US$76.4 million) in sales. Haitian, the industry leader, recorded a historic high of 7 billion yuan (US$1.1 billion) in 2010 sales.

The industry as a whole manufactured more than 300,000 units of machines last year.

Posted by Nina Ying Sun on March 31, 2011 5:28 PM | Permalink | Comments (4)

Haitian adds equipment to grow capacity

Hong Kong-listed Haitian International Holdings Ltd. announced an investment of 63 million yuan (US$9.7 million) in CNC machines and processing centers to make parts and components for plastics machinery.

The company made the purchase decision based on needs to boost its production capacity of plastics injection molding machines, Haitian said in an April 28 announcement.

The supplier is Haitian Precision Machinery Co. Ltd., an affiliated company of the injection press maker.

Posted by Nina Ying Sun on May 6, 2011 5:25 PM | Permalink | Comments (1)

Some Japanese press makers skipped Chinaplas

My colleague, Plastics News Asia Bureau Chief Steve Toloken, made some insightful observation at the Chinaplas show here in Guangzhou and wrote the following.

While this year's Chinaplas show is likely to top 85,000 attendees and has featured some notable announcements - such as Sabic and Sinopec building a US$1 billion joint venture polycarbonate plant - there's one notable absence from the usual hustle and bustle: a number of well-known Japanese injection press makers.

From conversations in the smaller Japanese pavilion at Chinaplas, it's not immediately clear why they're not here, but many of them seem to be skipping this year's show.

The absence is noteworthy. Chinaplas, which opened May 17 in Guangzhou, is China and Asia's largest plastics show, and China is an extremely important market to the Japanese: growth here was the biggest single reason Japan's injection press industry saw a substantial recovery of sales in 2010, to about 12,000 machines.

That's twice the level of its dismal 2009 during the worst of the economic crisis, and it put the industry back in the neighborhood of its historical sales levels, at least in terms of units, if not profits.

It's natural to wonder if not exhibiting reflects caution about Japan's economy as it copes with its tsunami and nuclear disasters.

One global petrochemical industry executive who manages operations in Japan offered another reason - it could reflect the spirit of self-sacrifice the Japanese people are exhibiting, as they do things like cancel vacations and cut back on spending as they try to pull together after the trauma they've been through.

Chinaplas organizer Adsale Exhibition Services Ltd. suggested that less Japanese presence is mainly due to companies focusing on the IPF show. Many firms made their decisions before the earthquake, and a few withdrew after the quake.

Posted by Nina Ying Sun on May 18, 2011 9:16 AM | Permalink | Comments (0)

Haitian now makes robots

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.

Posted by Nina Ying Sun on June 6, 2011 3:52 AM | Permalink | Comments (0)

Israeli fund invests in Ningbo firm

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.

Posted by Nina Ying Sun on June 21, 2011 11:36 AM | Permalink | Comments (0)

SPI pitches for NPE2012 at IPF

The Society of the Plastics Industry Inc. believes that NPE 2012 can avoid a repeat of the last show in 2009, when several big Japanese machinery firms threatened to pull out of the event during the worst of the global financial crisis, my colleague Steve Toloken reported from Tokyo.

Here is what he wrote:

Those companies ultimately stayed in NPE, after Washington-based SPI cut the fees that companies pay to exhibit.
SPI President Bill Carteaux and Gene Sanders, senior vice president of trade shows and conferences, hosted about 90 Japanese plastics industry officials at a reception in Tokyo during the International Plastic Fair in late October, to thank them and make a pitch for their continued participation in NPE.

Carteaux told Plastics News that "at the current time, all of the [Japanese] majors are in, no one [is] on the fence."

"Our Japanese participation is great," he said. "We have all the majors that were there in 2009 plus some additional. We are thrilled with the support from them."

"That said, we continue to work the market and believe we will continue to build the Japanese presence with some new comers," he said.

Carteaux also told the Japanese crowd that he believed the new location for NPE, in Orlando, will attract more participants from Central and South America, a market he said is "extremely important" to the Japanese. One-third of NPE attendees come from outside the United States, he said.

Toloken also sent me a copy of the script of Carteaux's speech at the reception. I noticed a few graphs that I thought worth sharing with some sentences highlighted:

Contrary to everything you may read in the press, the United States plastics market continues to do well. We continue to see growth in many markets...unless of course you are in housing. Trust me, I don't believe everything the press says about Japan; please don't believe everything you read about the US.
1. Overall US plastic shipments were up to $341 billion in 2010. We are now the 2nd largest manufacturing sector in the country.
2. A favorable exchange rate, and reduced rates for natural gas due to all of the new shale deposits that have been found bode very well for our exports. For the first half of the year exports were up 11% over 2010, which was a very strong year. We had a trade surplus as an industry of over $17 billion last year. China continues to be our third largest export market behind Canada and Mexico.
3. Plastic product production is back up to almost 90% of 2007 levels, before the recession. Our broad base of manufacturers is still very bullish on the future.
Overall, there is a resurgence of manufacturing in the United States for a whole host of reasons, not the least are rising global energy costs and labor in China. ...
Reshoring of products is happening at an increasing rate and major companies are making announcements that they are either building new plants or bringing assembly lines back to the States.

Posted by Nina Ying Sun on November 1, 2011 4:20 PM | Permalink | Comments (0)