China is projected to be the preferred spot in the world for new research and development spending by multinational corporations, according to one recent survey, and the world's plastic resin makers aren't losing any ground there.
DuPont Co., GE Plastics, Bayer AG and Dow Chemical Co., among others, all recently announced expansions of their plastics R&D work in Asia. The firms said they are making the investments to boost product development and design work in the region.
They're not alone. China tops the list of future R&D expansion locations in a 2005 survey of multinational corporations by the United Nations Conference on Trade and Development, with the United States and India coming in second and third, respectively. The number of foreign R&D units in China has risen from zero to more than 700 in the past decade, as companies look for lower-cost ways to innovate.
The trend should be put in perspective, though. The UN report said that while developing economies in Asia tripled their share of global R&D spending to 6 percent between 1991 and 2002, developed economies like the United States still account for more than 90 percent of the world's R&D spending.
Significant hurdles remain for China, like its weak protection of intellectual property.
``There is still a hesitation to bring top-in-class into the Chinese market because of the recognition that it could show up elsewhere pretty quickly,'' said David Witte, managing director of the Singapore office for consulting firm Chemical Market Associates Pte. Ltd.
Foreign firms often bring lower levels of technology into the country and then use distribution channels they establish to bring in higher-value goods made elsewhere, he said.
Still, companies are making significant investments in China. Several made announcements at the recent Chinaplas trade show, held April 26-29 in Shanghai.
DuPont's Packaging and Industrial Polymers unit, for example, is adding an industrial-scale, nine-layer Battenfeld Gloucester blown film line at its Shanghai R&D center for work on barrier films.
The line will be able to make film 30-250 microns thick, with a lay flat of up to 4 feet, and will include nine extruders. The company also is installing a three-layer blown film extrusion line, testing equipment and compounding and injection molding machines.
GE Plastics also is investing in Shanghai, putting in a 2,700-ton Husky injection compression molding machine to make body panels and research automotive glazing applications.
The firm also is opening a product development center in South Korea and spending $10 million to beef up its development center in Moka, Japan, this year.
The Japanese center works on automotive applications like pedestrian safety and under-the-hood items, while the Korean center will have injection molding and focus on telecommunications, display and automotive markets.
Korea is a major center of cell phone manufacturing worldwide, and GE Plastics wants to bring into that market some of its metal-replacement technology and its work, along with research partners, on organic light-emitting diodes as a replacement for glass, said John Carrington, chief of marketing for GE Plastics.
The company is looking for an early 2008 launch date for the OLED project, he said.
Bayer MaterialScience AG said it is expanding its polymer R&D center in Shanghai, making the facility the company's first in the Asia-Pacific region to do R&D work for all of its four regional business units: polyurethanes, polycarbonates, coatings and thermoplastic polyurethanes.
Dow Chemical Co. is planning to open an R&D center in Shanghai in early 2008.
``We will have over 600 people working in technical service, application development and global research by 2010,'' global business director Greg Jozwiak said in a recent interview in Shanghai, which is becoming the center of Dow's Asia business.
Staff reporter Nina Ying Sun contributed to this report.