Chinese extruder maker Zhangjiagang Changda Machinery Manufacturing Co. Ltd. is doubling its manufacturing capacity this year, in a move the company said is aimed at boosting exports in the face of tighter profit margins in its domestic markets.
The company, based in Zhangjiagang, makes about 120 pipe, profile and sheet extrusion lines a year, with about 70 percent of its sales going to the domestic market.
But overcapacity in the Chinese extrusion market is pushing prices down, and Changda Machinery wants to focus more on exporting, mainly to developing markets in Southeast Asia, India, Russia, Poland and Nigeria, said Jack Yang, business representative in the company's foreign trade office.
``There are too many plastic equipment suppliers,'' he said in an interview at Asian-Pacific International Plastics & Rubber Industry Exhibition, or Applas, held Aug. 15-18 in Beijing.
``The domestic market is full, so we want to export. The profit is very low.''
Zhangjiagang alone has 300 companies making various kinds of plastic equipment, he said.
While price pressures may be building, the firm's domestic sales have been growing, led by moves in China to replace cement water and sewer pipes with plastic, said General Manager Zhang Jin.
Overall sales rose from US$4.5 million last year to US$5 million this year, with Changda's main pipe markets being polyethylene and PVC for water, sewer and removal of hazardous gases and liquids in mines. The company also manufactures PE and PVC profile equipment, wood-plastic compounding machinery, waste-film recycling machines and auxiliary equipment like dryers, feeders and mold temperature controllers.
Changda's new factory will be 108,000 square feet, next to its current factory of the same size, where it employs 80. The new plant will roughly double employment, Yang said.
Most of the company's pipe equipment, which can make pipe as large as 4 feet in diameter, stays within China, although some is exported to India and Pakistan. And, earlier this year, Changda sold its first line to North America, according to Yang.
The line sold in North America was for ABS pipe, he said.
Much of the company's profile extrusion equipment is exported, mainly to Poland, Malaysia, Nigeria, Thailand and Russia, he said.
Yang singled out Russia as a market of particular interest, with the country's boom from oil and gas prices pushing up demand for plastic pipe: ``The domestic situation in Russia is steady. We think we will have a good market.''
He said the company is also targeting Iran and plans to exhibit at a plastics fair in that country in November.
As well, Zhang said the company wants to explore the PET sheet and profile markets and PVC film packaging extrusion.
Changda is focusing its attention on developing countries, she said.
``We are trying to explore markets in North America and Western Europe, but we will focus on developing countries,'' Zhang said.