CHICAGO (June 29, 4:10 p.m. EDT) — Shandong Dawn Group Co. Ltd. is doubling its compounding capacity, but what makes this different from ordinary expansions is that the company does not need to buy additional land. Dawn has developed a 1,600-acre industrial park in Longkou, China, where its own 740-acre campus is located.
At NPE 2006 in Chicago, Dawn met with a Canadian food-packaging company interested in locating an operation in the park. The compounder wants more processors to locate there.
“It is our goal to integrate the downstream processing industry to the industrial park,” said Mi Yongcun, group vice president and general manager of Longkou Dawn Engineering Plastics Co. Ltd. and general manager of Shandong Dawn-BH Elastomer Co. Ltd.
Dawn compounds nylon, polypropylene, polyethylene, high-impact polystyrene, ABS, PET, and alloys such as polycarbonate/PET, PC/ABS and PC/polyester. It also compounds engineering plastics including PPS and polyetheretherketone.
In addition, the company claims to be the leading Chinese maker of thermoplastic vulcanizates. It compounds the material on a German twin-screw extruder, and Dawn claims to be the only Chinese company that owns more than one patent related to TPV.
The company is planning a broad expansion, “Our annual capacity of all products will be doubled to 60,000 metric tons (132.3 million pounds) in two or three years, at the latest,” said Qiu Huanling, director of imports and exports.
“If the overseas market reacts well enough to our reaching-out efforts, the expansion could be achieved by next year.”
About 80 percent of the products are sold in China, but Qiu said the share of exports could go up to 25 percent in the foreseeable future. The primary export markets are Southeast Asia, the United States, Germany, Italy and the Middle East.
Domestically, Dawn is a supplier for automakers such as First Auto Works Group and Chongqing Changan Automobile Co. Ltd., home appliance makers like Haier Group, and the electronics industry.
“Auto is our largest and fastest-growing end market. Everyone sees the business potential raised by enthusiastic Chinese auto buyers,” Mi said.
The firm has used agents in the United States since 2004. But Mi said many foreign buyers hold biased view on Chinese resins.
“Although the overall level is lagging far behind the West, the quality of specific materials can be internationally competitive,” he said.
He said the target in North America is low- to middle-level markets.
“It is difficult to get to the high end. Large companies are already there and won't give it away. Plus, honestly, we don't have the capabilities yet. There will be too much certification required.”
Privately held Dawn started in 1991 and now employs 1,100 with 14 subsidiaries. The company reported sales of 3.5 billion yuan ($438 million) in 2005.
Dawn runs a 50-person research and development lab, as well as a joint lab with Beijing University of Chemical Technology.