The torn up airline seats in the Hong Kong Productivity Council's plastics technology lab reveal one possible future that the government-funded research center sees for the Chinese plastics industry.
There, in the midst of prototypes of water-assisted molding machines and micro-part injection presses, HKPC researchers have started dismantling airline seats, looking for opportunities for the local plastics industry.
HKPC's thinking is straightforward. It expects China's domestic market for manufacturing aircraft to start to take off, similar to the country's automobile industry today. And the group doesn't want Hong Kong's local plastics companies to be left at the gate.
``We are trying to look at the windows of opportunities,'' said L.M. Li, general manager of HKPC's manufacturing technology division.
``We view aviation as the next wave of development in the Chinese local market,'' Li said.
One possibility is with European conglomerate Airbus, which plans to start assembling its A320 model at a joint venture plant in Tianjin as early as 2008. And Li believes there are opportunities for local plastics companies. For example, a recent HKPC mission to Europe found members of the Airbus supply chain looking for plastics parts suppliers in Asia.
But that's not the only opportunity HKPC is considering.
Li and other officials said in an Oct. 6 interview that this year HKPC and its partners in industry have commercialized or are about to commercialize technology for water-assisted molding machines and micro-part fabrication, and diffusion bonding techniques for mold making.
In the past, HKPC research helped Hong Kong's local plastics machinery industry develop an all-electric injection press, said Thomas Kwok Keung Lee, principal consultant in the manufacturing technology division.
The council sees its HK$447 million (US$57.3 million) annual budget helping local companies, especially small and midsize enterprises, to boost their competitiveness in areas such as plastics, metals, environmental compliance and management systems.
Hong Kong firms are major investors in China. HKPC estimates that companies in the city of 7 million people own about 15,000 plastics factories employing a whopping 2.5 million people in China's Pearl River Delta manufacturing zone, directly across the border from Hong Kong.
In spite of that investment, HKPC officials have suggested that some smaller Hong Kong firms are still too dependent on competing in low-value, lower-margin manufacturing, instead of relying on technology.
``As the majority of Hong Kong's [small and medium-size] manufacturers are still engaging in low value-adding [original equipment manufacturer] modes of operation, they are faced with other challenges, including the rising production costs in the Pearl River Delta, stringent environmental regulations, and intensified competition in the international arena,'' said Stephen Lee, acting executive director of HKPC, in a Sept. 20 HKPC news release.
Li said HKPC has identified other markets it sees as higher value for the local plastics industry: automotive, medical devices and optics, including lenses for cameras imbedded in mobile phones.
He said the group first identified auto parts as a market 10 years ago, when China made only about 200,000 vehicles a year and projections called for it to make 1 million by today. Instead, China makes about 4 million cars a year.
He said the aircraft market could be similar because demand in Asia is growing, as low-cost carriers create demand and make air travel a mass market like they did in North America, according to Li.
But there are only about 20 companies in China capable of producing world-class aviation parts, compared with thousands in North America, forcing even Chinese manufacturers to import many key components and creating opportunities for sophisticated suppliers, Li said.
In general, HKPC tries to find technologies that have higher barriers to entry, like micro injection molding, and develop either technologies to license to machinery makers or techniques to provide to processors, said Samson Kwok Wai Suen, senior consultant in the manufacturing technology division.
HKPC said it focused on water-assisted molding systems because it's a technology available mainly in Europe, and Hong Kong firms were finding it tough to get adequate technical support.
Like gas-assisted molding, water machines are good at making hollow parts and have faster cooling times than gas technologies, HKPC said.
``Once [local manufacturers] acquire the technology, they can differentiate themselves from the lower-end manufacturers in China,'' Kwok Wai Suen said.
The projects are funded jointly by government and industry, and require at least two local companies to put in at least 10 percent of the government contribution.
Government spending for its recent plastics-related projects include HK$9 million (US$1.15 million) on micro-fabrication and developing micro-molding presses, HK$2.3 million (US$295,600) on water-assisted molding technology, HK$6.4 million (US$822,500) on diffusion bonding and HK$1.5 million (US$192,800) on compounding techniques for environmentally friendly thermoplastic elastomers.