CHICAGO (July 10, 5:35 p.m. EDT) — Hong Kong-based Chen Hsong Machinery Co. Ltd. is opening its first direct sales office for the United States and Canada, with a facility near Toronto.
Chen Hsong officials announced the new strategy at NPE 2000.
Julio Ortiz will run the office, which officially opens Aug. 1 in Richmond Hill, Ontario. Before joining Chen Hsong, he worked at Engel North America's injection press plant in Guelph, Ontario, and Corma Inc., which makes pipe corrugating equipment in Concord, Ontario.
Chen Hsong Machinery is not a household name to most North American molders. But its parent company, Chen Hsong Group, claims to be the world's largest injection press maker, in terms of units produced. Rays Chiu, marketing strategy manager, said maximum capacity is 9,000 presses a year. Actual production in recent years has been much less, around 5,000-6,000, because of the Asian slowdown, he said.
By comparison, Japan-based Nissei Plastic Industrial Co. Ltd. builds about 3,000 presses a year.
Chiu said Chen Hsong's strategy to sell through sales representatives in the United States did not work. The company used several different sales firms, at times creating confusion.
"We didn't renew the contracts after last year. We want to sell direct to the U.S. and Canada. That's why we're putting the office in Toronto, we want to sell direct and (provide) service for our customers," said Chiu, who handles long-term planning for exports at Chen Hsong.
The press maker will emphasize spare parts and service. In the past, Chiu said, Chen Hsong left it up to local sales reps to source parts for customers locally, or the agents could order them from Hong Kong.
"We were not successful to sell here in the past because (customers) asked for more direct, after-sales service and more direct sales activity," Chiu said in a June 22 interview at Chen Hsong's NPE booth.
Chen Hsong employees also will handle turnkey systems, including robots, machine installation and plant layout and complete engineering support. The company is hiring technicians and other employees for the new office.
The Canada facility also will get involved with sales to Mexico and South America, said Ortiz, who speaks English, Spanish and Portuguese. He stressed that Chen Hsong is satisfied with its sales agents in those regions and will retain them.
"That office in Toronto is going to be support for them," Ortiz said.
At NPE, Chen Hsong introduced the JM series of two-platen press, with 550 tons of clamping force. The JM line, which has a hydromechanical clamp, extends up to 3,200 tons.
Chen Hsong is a dominant player in the growing Chinese market for plastics machinery, through its own manufacturing and through joint ventures to make Battenfeld extruders and Krupp blow molding machines in China's Guangdong Province.
China plays a key role in Chen Hsong's manufacturing future, as well. Chen Hsong has built a huge plant in Shenzhen, China, and the company is moving much of the production at its Hong Kong headquarters plant to China.
Chiu said that, after the move, about 65 percent of the company's total production will come from China, 30 percent from Taiwan and just 5 percent from Hong Kong. Currently, the breakdown is more evenly split — 40 percent from China, 30 percent from Hong Kong and 30 percent from Taiwan.
The modern plant in China will allow Chen Hsong to greatly boost its assembly operation, from the current maximum capacity of 9,000 presses up to 12,000 after the Shenzen factory reaches full production, Chiu said.
Ortiz stressed that the Chen Hsong presses have the same level of technology in each country. "The reliability of the machine is very high," he said.
Chen Hsong does plan to introduce a special machine for sale only in China, but the press has not been introduced yet, Ortiz said.
In May, the company opened an office in Zhongshan, China
Chen Hsong expects its plastics machinery-related sales to reach $154 million for its fiscal 2000, which will end July 31.
The company, founded in 1958 by Chen Chiang, is publicly traded in Hong Kong.