Siegel-Robert Automotive, an injection molder based in Farmington Hills, Mich., celebrated the grand opening of its first manufacturing plant outside of the United States in late September. The plant, located in the east China city of Suzhou, will make chrome-plated and decorated plastic components for the local market and export.
``We are seeing more competition from China and [South] Korea,'' said President Robert Simpson. ``To maintain our market position, we had to look for ways to reduce our costs.''
The 200,000-square-foot plant operates presses from 440-1,000 tons, for molding ABS and polycarbonate/ABS blends. It also does decorating, including electroplating of copper, nickel, chrome and special finishes; painting; and assembly. Among the parts it will manufacture are radiator grilles, nameplates, door handles, interior trim, and side moldings.
The China plant will be fully operational in January. By mid-2006, phase-two construction will begin to double its current square footage. In all, Siegel-Robert will invest between $30 million and $40 million in the project.
The plant can buy most of its resin locally, according to the company. GE Plastics is its primary supplier right now, and the company also is looking at Dow Chemical Co. as a possible China source, Simpson said. Though China is touted as a low-cost country, ``resin costs are about the same as what you pay in North America,'' Simpson said. ``The savings are in labor-related costs,'' he added.
Siegel-Robert Automotive's move to China came out of a decision to follow its biggest customer, General Motors Corp. ``We transferred our processes to China to grow our business with GM,'' Simpson said. It chose Suzhou, an hour's drive northwest of Shanghai, because of its proximity to Shanghai General Motors.
Other customers include Toyota, DaimlerChrysler, Nissan and Honda, and all assemble cars in China. But Siegel-Robert also wants to plumb the export market.
``When we set up the facility in China, we had two things in mind: export back to North America and grow our share in China,'' Simpson said.
The Suzhou site will have design capabilities, though research and development still will be conducted in the United States. The firm also plans to establish a China tooling group that makes tools and plating racks, to take advantage of the country's ``more competitive'' tooling prices, Simpson said.
The China plant's launch will not result in Siegel-Robert Automotive closing any of its U.S. plants - six in all, in Missouri, Kentucky, Tennessee and Indiana, according to Simpson
``We see growing in the U.S. and in China, and hopefully more in Europe,'' he said. He noted its China presence also is opening doors to the European market, as the firm already has been contacted by Renault and PSA Peugeot-Citroen.
``All of a sudden, the European [carmakers] are knocking on our door to see if we can export back to Europe,'' Simpson said.
Siegel-Robert Automotive is the largest division of privately owned Siegel-Robert Inc. of St. Louis. The parent company ranked 15th on Plastics News' recent survey of North American injection molders with molding sales of $371 million, and total corporate sales of $500 million, for 2004.
Other Siegel-Robert divisions using plastics are Siegel-Robert Plastics, which makes parts for health-care, consumer, electronic and automotive industries; Advantek, which makes plastic packaging tapes; and Correll, which makes tables. None of the other divisions have plans to open plants in China at this time, said Jeff Gammons, marketing and strategic planning director for Siegel-Robert Automotive.
Alysha Webb is the Beijing-based staff reporter for Automotive News, a sister publication of Plastics News.