Malaysian stretch film maker Thong Guan Industries Berhad is spending $5 million on a new factory in Suzhou, China, as the firm plans a facility in Vietnam.
The Kedah, Malaysia-based firm is adding two extrusion lines at a plant it is building in Suzhou, next to its existing stretch film and garbage bag manufacturing plant.
`'In Asia, there is still a lot of room for growth,'' said P.K. Ang, director of the firm, which claims to be one of the largest stretch film manufacturers in Asia.
The new, 2-meter, fully automatic lines in Suzhou will give the firm a total of 4.8 million pounds of capacity there and give the company four lines in Suzhou, Ang said.
The firm built the Suzhou plant, near Shanghai, to be closer to Japan and its garbage bag market, reducing sailing time to market from 10 days via Malaysia to four from China, Ang said.
Japan consumers sort garbage and recycle it into several different types of clear bags, creating strong demand, he said. The company's marketing has not been hurt by Japanese attempts to cut back on use of plastic bags in retail stores, he said.
Ang said the company plans to build the Vietnamese plant in 2008, to be closer to the markets in Southeast Asia and to supply that country's growing markets.
As well, the Vietnamese plant would give the country additional options for shipping to markets like the United States and Europe, which have either put restrictions or are considering restrictions on imports of some types of plastic bags from Malaysia, China and Thailand.
With its Suzhou expansion and the planned facility in Vietnam, the firm is giving more thought to exporting stretch film to North and South America, Ang said.
The company has a total capacity of 187 million pounds of stretch and blown film, and also has stretch film operations in Thailand.