CHICAGO (July 28, 4:55 p.m. EDT) — Taiwanese extrusion equipment manufacturer Fong Kee Iron Works Co. Ltd. has opened a manufacturing plant in China, its first since closing down an operation there in the mid-1990s.
The company, which is one of Taiwan´s largest extruder makers, is setting up operations there to improve service to customers on the mainland, and not primarily as a move to control costs, said sales director Susan Wei.
The Tainan-based company opened its 118,400-square-foot factory in June, in Guangdong province, across the border from Hong Kong.
The new operation will make accumulator-head blow molding machines, cast-film lines for markets like food packaging, and extrusion lamination machines, according to Wei.
Fong Kee officials previously had raised concerns about having equipment copied by mainland firms, but the company is working there with suppliers with which it has had long relationships, Wei said during an interview at NPE 2006 in Chicago.
The plant cost about $1.6 million to set up, she said.
The company wants to provide better service to customers, particularly those that might lose their ability to import machines to the mainland with reduced duties.
As well, she said, Fong Kee views the mainland factory as a hedge, if political changes in Asia make it more difficult to use Taiwan as a platform to export within Asia.
The company does about $30 million in annual sales, selling about 20 percent of its machines in mainland China. It expects the Guangdong plant to provide about $3 million in annual sales, Wei said.
Fong Kee was exhibiting at the show as part of a push to expand its market presence in North America, where it believes it can offer quality machines cheaper than most North American or European suppliers, Wei said.
It has only a small presence in both those markets, although it has had a sales and service agent in the United States for about a decade, and has had buyers express interest in its equipment, she said. Most of its sales in the Americas have been in South America, according to Wei.
``We have not quite concentrated in the market before,´´ she said.
The firm also sells continuous extrusion systems and accumulator-head blow molding machines for containers up to 52 gallons, PE film lines, and multi- and monolayer film and sheet manufacturing lines.
The new Guangdong plant will employ up to 50 and started training staff this month. Wei said that hiring skilled labor can be challenging in China.