CHICAGO (June 27, 1:10 p.m. EDT) — When China Pack (Zhejiang) Jing Xing Plastic Packaging Co. Ltd. was founded a decade ago, it was the Chinese government that decided the firm would introduce biaxially oriented polystyrene sheet production to the country.
Today at NPE, the company is reaching out in the international market as it shifts from government to private ownership.
NPE was the firm's first international trade show outside of China, and the company is exploring the North American food-packaging market, which currently buys 40 percent of the company's products.
“We are planning to open a sales office in Los Angeles soon,” said General Manager Lou Yuntao.
The company probably will start with wholesalers in the United States.
“Although we really would like to directly reach the retailers and offer our price advantages to the consumers without middlemen, that could take some time. NPE is our first step. We are getting a taste of the market.”
Lou said the company has confidence in its strength. “The cost advantage we can offer, compared to North American processors, is beyond your imagination,” he said.
“Our challenge is how to get exposed to the market, interact with the local [customers], and create a win-win.”
The processor extrudes BOPS sheet up to 96 inches wide, and has capacity to make about 18 million pounds of sheet and 6.6 million pounds of thermoformed product annually. The thermoformed products are used in packaging for food, medicine, electronics and textiles.
The factory covers more than 215,000 square feet, employs about 120 and runs four shifts.
“We are looking to add a production line and double the production capacity in two to three years,” he said.
The Chinese market, which consumes half of the company's production, is “still taking baby steps compared to the States,” Lou said. Jing Xing claims to be the second-largest BOPS sheet producer in China. The parent company, Beijing-based China National Packaging Corp., imported a production line for sheet from Mitsubishi Heavy Industries Ltd. and thermoforming machines from Sencorp America and GN Canada in 1994.
“At the time, none of the Chinese makers offered such machinery,” he said.
The Chinese BOPS sheet industry still remains small after starting in the mid-1990s, as it is limited by domestic demand. There are fewer than 10 producers nationwide, Lou said.
The Chinese BOPS sheet market measures 33 million pounds annually, dwarfed by the 881 million-pound U.S. market.
“Although the growth rate is high in both countries — 15 percent in China, 7-15 percent in the States — the gap in scale will last for quite a while,” Lou said.
“Speaking of the present and near future, the green packaging trend is much more evident than in China,” he added.
The firm's production increased 60 percent in 2005, and sales were up 85-90 percent.
“We predict a 20 percent growth this year,” Lou said, “but of course, growth rate numbers need to be put in perspective.”
The firm was founded as a 100 percent state-owned enterprise, but since 2002 two-thirds of its shares have shifted to CNPC.
“We still find it difficult in expanding the company that we have to submit everything to Beijing and wait for approval, while the volatile market waits for no one,” he said.
Transformation and restructuring are under way. According to Lou, the company will become privately held by the end of July, with state-owned shares cut to less than 20 percent. He said state ownership has benefited the company tremendously, in terms of investment in technology, standard business practice and credibility and reputation in the industry.
“But we expect to further improve our production efficiency by getting rid of the SOE side effects,” he said.
In addition to Chinese and U.S. markets, the firm exports to South Korea and Japan.