Among the 30-or-so twin-screw extruder makers in China, the only multinational supplier - Coperion Group - claims to be the leader with a 50 percent market share.
The firm's success is truly a marriage of East and West.
Stuttgart, Germany-based Coperion established its fourth global subsidiary in China two years ago by acquiring the then market leader, 11-year-old Keya Inc. of Nanjing, China. Keya was founded by senior engineers from China's former Ministry of Chemicals Industry.
``Scale leads to profitability,'' sales manager Pan Zhirong told Plastics News at the recent Applas show in Beijing.
An indicator of the scale is the 272 extruders sold in the first half of 2006.
Coperion Keya (Nanjing) Machinery Co. Ltd. posted after-tax sales of 180 million yuan ($22.6 million) last year, two thirds from domestic sales, and one third from exports.
Claiming to occupy the mid-to-high-end market in China, Coperion Keya supplies to Sinopec and China operations of BASF AG and LG Chem Ltd.
``We definitely let go of the low-end market,'' said Beijing manager Liu Hongtao, ``We leave that part to smaller players.''
In China, the booming automotive industry brings Coperion Keya the strongest momentum, Pan said. Other traditional end markets, including wire and cable, electronics, medical, and building and construction, are growing in double digits as well.
Pan said government's cooling-down policy is not a concern, ``but there are too many low-end machines out in the market. ... Selling becomes very difficult, which further reduces the price.''
Keya Inc. was not the only spin-off from MCI's Research Institute of Chemical Machinery. Lanzhou-based Lantai Plastics Machinery Co. Ltd., which still conducts government-subsidized research on co-rotating twin-screw extruders, sells 100-120 units a year and reports annual sales of 30 million to 50 million yuan ($3.7 million to $6.3 million).
``The demand [for compounding twin-screw extruders in China] is just several hundred,'' said Miao Jingfeng, Lantai's manager of corporate planning. ``The major players are gaining certain balance, while the small companies struggle for sales.''
Both Coperion Keya and Lantai said annual sales growth is more than 20 percent. That growth rate does not sound bad even in the ever-expanding Chinese market. But for Coperion Keya, faster growth will come from exports, especially with its parent company's support in product improvement and global sales channels.
``We made 60 million yuan [$7.5 million] in exports last year. We will double that this year,'' Liu said. The company expects the number to hit 220 million yuan ($27.6 million) in 2007.
Coperion Keya, which employs 418, currently exports to Southeast Asia, Europe and North America.