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July 18, 2005 02:00 AM

Growing GE anticipates Beijing Olympics

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    General Electric Co., already busy expanding plastics compounding and polycarbonate film capacity at one of its China sites, is contemplating a new compounding plant in east China by 2008.

    The firm also is gearing up for the rush of business likely to be spurred by that year's Beijing Olympics, said a trio of senior GE executives in an interview at the recent Chinaplas show in Guangzhou.

    Alan Leung, GE Advanced Materials' plastics president for Greater China, said a previously announced expansion at Nansha, in southeastern China, should be completed by October. The company is adding two lines to extrude high-end PC film, and is doubling to 16 the site's number of lines to make its range of engineering thermoplastic compounds.

    He also said GE will look at adding a plant on a greenfield site in the east, since the southern part of the country already is well-served by two production facilities there - in Nansha and Zhongshan. GE operates a third compounding plant further north, in Shanghai's Pudong region, and generates more than $1 billion in plastics sales annually throughout Greater China. Altogether, the company runs 13 plastics compounding facilities across Asia.

    GE wholly owns all of its plastics facilities in China, where it employs more than 12,000 people. General Electric started doing business in China in 1906, and said it has invested more than $1.5 billion to establish 36 legal entities in China.

    John Carrington, general manager of global marketing for plastics in Pittsfield, Mass., said GE has learned a lot of lessons about building compounding plants more efficiently via its expansion efforts in Nansha and its large complex in Cartegena, Spain.

    Company officials also clarified that a previously announced investment at GE's plant in Moka, Japan, is not designed to boost capacity, but rather to make the plant more flexible and allow it to produce smaller, specialty lots of material. That change will allow it to introduce the full range of its custom-engineered LNP Engineering Plastics products there.

    Leonard Kosar, GE Advanced Materials' plastics president for the Pacific region, noted that GE already employs 200 advanced-materials engineers at its $64 million, 21-month-old technology center in Shanghai. About 60 percent of the engineers hold doctorates.

    What looms largest on GE's China horizon is the 2008 Olympics. The firm is a major sponsor and GE Asia executives already boast business cards bearing the Olympic logo. China's government plans to spend massive amounts of money on infrastructure improvements - from a new terminal at Beijing's airport to new stadiums, subway and rail lines, lighting, security, energy generation and the like.

    Former GE Polymerland President Peter Foss in Fairfield, Conn., is leading the company's Olympics efforts, which will be massive in their own right. Leung pointed to the expected demand for such items as fire-resistant seating, security glazing and low-toxicity interior panels for airplanes, trains and subways. It just so happens that GE has products that address all those areas and more. Displays on the firm's large Chinaplas booth highlighted some of those applications.

    Its thermoformable Ultem polyetherimide alloy sheet, for example, is making good inroads into airline and rail interiors.

    At Chinaplas, the company touted three new, transparent armor laminates for security glazing. GE's Armorgard, Suregard and Lexgard laminates absorb up to 57 pounds per square inch, or the equivalent of 4,300 pounds of TNT explosives detonated from 115 feet away, the company said. The laminates ``may withstand gunfire from weapons ranging from 9mm handguns to 7.62mm NATO high-powered rifles,'' according to company literature.

    The firm also displayed roof tiles fabricated from thermoformed decorative sheet made of weatherable Geloy acrylic styrene acrylonitrile resin and then coextruded with PVC.

    Molder FangXing Building Materials Co. Ltd. in Shandong, China, is producing the tiles. GE claims they weigh less and offer a variety of color and style options, better performance and a lower system cost than traditional roofing materials.

    The company said the Chinese roofing industry, fueled by a construction boom, is expected to grow by more than 10 percent a year to nearly 40 billion renminbi ($4.83 billion) in 2008. GE is benefiting already. It said municipal governments in Shanghai and elsewhere in China have chosen the Geloy/PVC tiles for its ``plain to pitch'' project, which is replacing flat roofs with pitched roofs that resist leaking.

    Automotive is another hot China market targeted by GE. The company recently rolled out a flame-retardant Flexible Noryl polyphenylene oxide resin that it is promoting for use in under-the-hood wire and cable coating applications.

    But Flexible Noryl coatings are not limited to automotive applications. GE said Hong Kong-based LTK Industries Ltd., a leading wire and cable maker in China, has opted to use the material for the audio-visual cables used in flat-screen televisions.

    When it comes to product design and development, ``Everything happens faster here,'' Carrington said. For example, he said, mold makers in China now often cut laptop tools in just 20 days, compared with the several months it used to take.

    And Leung said some trend-conscious Chinese consumers now buy four cell phones a year, to ensure they have the latest features, colors and designs.

    He also said there is much discussion about outsourcing by Western brand owners and original equipment makers of production to China.

    But some big Chinese manufacturers view such relationships in a different light. As they prepare to start building their own, local brands, ``Chinese firms see it as if they are outsourcing their marketing to Apple'' and other Western firms.

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