SIG Blowtec GmbH & Co. KG has launched a strategy to sell its Chinese-made extrusion blow molding machines into the U.S. market, offering a lower-price option to its customers.
The Blowtec division, based in Troisdorf, Germany, made the move to help expand its machinery base worldwide, said Peter Andrich, vice president of sales for SIG Beverages North America Inc., the U.S.-based distributor of the Blowtec machines. The move also represents an about-face for the company, which until now had made most of its U.S.-installed Blowtec equipment in Germany.
The first machine originating in China was installed in June at blow molder Champion Packaging and Distribution Inc. of Woodbridge, Ill. To promote the sale, SIG shuttled about 60 people a day during NPE 2003 from McCormick Place in Chicago to the Champion facility. A second machine is on order for another U.S. customer, Andrich said.
``They made it extremely attractive for us to purchase,'' said President Tom Pecora of Champion, a maker of windshield-washer solvent, bleaches and deck-washing solution that began blow molding bottles for its own products in 1995. The firm needed a new machine that was versatile, Pecora said. ``We're going to run continuous testing on it to see if it can get the job done.''
The continuous shuttle equipment, made at Blowtec's longstanding plant in Shunde, China, is between one-third and one-half the price of the German-built units, Andrich said. Those more-sophisticated German units, built in Troisdorf, will continue to be offered to the U.S. market, he said.
Blowtec's parent company, SIG Group of Rhine Falls, Switzerland, had considered selling the unit, according to sources familiar with SIG. Now, the company will keep Blowtec and use China as a springboard for expansion, Andrich said June 26.
While other made-in-China extrusion blow molding machines are sold in the United States, most machines come from Asian manufacturers without the U.S. presence of SIG, he said. Others, such as Graham Machinery Group of York, Pa., just now are setting up operations in China.
``Most of the [Chinese-made] machines sold here are being listed in catalogs,'' Andrich said. ``They are cheap, but it's very adventurous for someone to buy them. There is no support, and no technical people on the ground in the United States.
``We want to build as good a machine in China as we do in Germany.''
The machines that the Blowtec operation plans to sell here are simplified versions of its existing model, Andrich said. The equipment contains frames made in Germany. But the guts of the machine, including the barrels and other components, are made in Shunde.
The company will offer technical support from SIG Beverage's U.S. headquarters in North Branch, N.J.
The Chinese plant originally was set up in 1994 as a joint venture with Hong Kong-based Chen Hsong Machinery Co. Ltd., when the SIG machines went under the Krupp Kautex name. Over time, SIG has purchased nearly the entire operation, Andrich said.
The Chinese-produced machines still are sold under the Krupp Chen brand name, but that name soon will be changed to Blowtec, he said. The shuttle machines primarily are used to make packaging containers made of high density polyethylene or PVC.
As it ramps up in China, SIG will stop producing extrusion blow molding machines in Sao Paulo, Brazil, Andrich said. The Brazilian facility will continue to make two-step PET blow molding machinery and other equipment, he said.
``Brazil is the right place for two-step PET equipment,'' Andrich said. ``It requires a greater degree of manufacturing difficulty.''
The machines made in China are harder to ship. Customers must wait as long as a month to get the equipment out of Chinese customs, he said.
After a slow start during the first few years of operation, the Shunde plant has been a strong producer for SIG, Andrich said. The facility in southern China now makes more than 30 shuttle machines annually, he said. Until now, most of the equipment was sold into mainland China.
That changed recently, with the Champion deal.
``Everything seems to be good quality,'' Pecora said. ``We don't have a problem with them shipping it from China, where the labor is cheaper. We know it's manufactured to German specifi- cations, and that helps.''