Demag Plastics Group has become sole owner of its injection press joint venture in China, buying the remaining 40 percent stake from its Chinese partner, Ningbo Haitian Group Co. Ltd.
DPG already owned 60 percent of Demag Haitian Plastics Machinery Ltd., in the city of Ningbo, China.
Gerhard Massfelder, the chief executive officer of Demag Haitian Plastics Machinery, said DPG wants to reduce production costs within the next two years to keep its equipment competitive in China.
Demag Haitian has assembled about 1,000 injection molding machines in Ningbo since Germany-based DPG and the large Chinese press maker created the joint venture in 1998 - making it one of the earliest and most productive joint ventures linking a Western plastics machinery maker and one in China. But officials of Demag Plastics of Schwaig, Germany, began looking at the venture's future, and this year they made public comments suggesting they would end the agreement.
Massfelder told Plastics News about the buyout in a Nov. 15 interview during the Malaysia-German Technology Conference in Kuala Lumpur. Before he got promoted to the top spot at Demag Haitian in August, Massfelder was managing director of DPG's subsidiary in Kuala Lumpur.
The change in ownership came under Beijing's new policy of allowing foreigners 100 percent ownership of companies. Previously it was mandatory that foreign investors take local partners.
Massfelder said Demag Haitian aims to reduce the imported-component content in the machinery to 10-15 percent during the next two years to keep its product competitive.
``We started in 1999 with 80 percent of the imported machinery components, which were mostly from Germany, and have since reduced it to 40 percent,'' Massfelder said.
``We want to have machines, which are very much a China national product,'' he stressed. The investment in Demag Haitian is for the Chinese market, he said.
``We can now also look at exporting the Demag Haitian machines to Southeast Asia, but it is not yet a priority,'' Massfelder said.