CHICAGO (June 29, 5:20 p.m. EDT) — Chinese profile extruder Dalian Shide Group plans to build at least six PVC pipe plants in China and is exploring adding resin manufacturing capacity there, further extending a previously announced major expansion of its PVC capabilities.
Xu Ming, 29-year-old president, chief executive officer and owner of the company, said in a June 19 interview at NPE 2000 that Dalian Shide plans to build six to eight PVC pipe plants across China in the next three to five years, each with capacity to process about 175 million pounds of PVC per year.
Two of the plants, in Dalian and Tianjin, are being planned now and will be completed by the end of next year, he said. The firm, based in the industrial city of Dalian in northeast China, expects to invest about $25 million per plant, said Xu, who also is owner and chairman of the Dalian Shide Football Club Co., China´s top-ranked soccer team.
Details of the pipe and potential resin plans emerged during a ceremony Dalian Shide and three supplier companies held at NPE 2000 to officially sign the contract for a previously announced order for 120 extruders and related equipment to manufacture vinyl window profiles. Company officials said that previous deal, announced in December and worth an estimated $58.8 million, will give them more than 200 extrusion lines and the capacity to extrude more than 1 billion pounds´ worth of PVC profiles per year by the end of 2001.
Dalian currently has capacity to produce 265 million pounds a year in window profiles, and projects that will rise to 617 million pounds by year´s end.
The previously announced expansion will add 1,600 employees in its profiles business, and add about 600 employees for each pipe plant. The company employs about 4,000 now and anticipates having a work force of some 7,000 by the end of 2001.
Xu said there is such pent-up demand for windows in China that widespread shortages exist. He estimated that vinyl-window demand in the country has been growing at about 10 percent a year, but that that may skyrocket when more product becomes available.
The company claims to be the largest manufacturer of window profiles in the world, with the Chinese market consuming about 95 percent of its production.
Xu estimated the contract is worth about $58.8 million.
Dalian did not release details of resin manufacturing it may add, but Xu said he has met with officials from DuPont, Dow Chemical Co., Formosa Plastics Corp. and Oxy Vinyls LP about partnerships and technology transfers, during his current trip to the United States.
He said the company wants to build a PVC resin plant with annual production capacity of 3.3 billion pounds and a vinyl chloride monomer plant with capacity of nearly 4 billion pounds.
Xu, speaking through a translator, made a point in the interview to say the contract signing indicates his company remains on target with its previously announced ambitious profile expansion plans. The window extruders it ordered are a mix of Titan conical twin-screw models and parallel twin-screw machines from Vienna, Austria-based Cincinnati Extrusion Technology Austria GmbH.
In addition to the extruders, Dalian Shide is buying powder-handling and compounding systems from Reimelt KG of R"dermark, Germany, and extrusion tooling and downstream equipment from Greiner Extrusionstechnik of Wartberg, Austria.
It also is receiving significant technology transfer from the consortium, including a technical maintenance center at Dalian Shide´s production facility. The next phase will train Dalian technicians to perform final tooling, the companies said in a statement.
Xu said Dalian has about $300 million in annual sales in vinyl-window profiles. It wants to increase exports from roughly 5 percent of current sales to about 15 percent within three years of completing its window expansion, Xu said. He indicated target export markets include Russia, Eastern Europe, Egypt, South Africa and the Middle East.
The company also is considering building PVC pipe plants in South America and Africa, but wants to finish its current expansion first, Xu said.