In addition to ambitious pushes into the U.S. PVC pipe market, Guangdong Liansu Technology Industrial Co. Ltd. is also launching a new line of wood-plastic composite decking, trim and molding products.
After a year-and-a-half product development, Hong Kong-based Liansu started making polyethylene-wood composite decking and PVC-wood composite trim and molding earlier this year. The total investment on the project nears $5 million, including six extrusion lines.
These lines are ``exclusively dedicated to making [wood-plastic composite] for the U.S. market,'' regional sales manager Alex Kwok said at the Plast-Ex 2007 trade show held May 1-3 in Toronto. He said the company aims to ship about five containers of extruded products, including PVC fencing, every month to North America from its production base in Foshan, China.
In February, Liansu announced its plan to invest $26 million to become the first Chinese firm to ship significant quantities of PVC pipe to the United States. It is adding 50 extrusion lines to increase the total to 200. In April, it added 200 sets of molds for its 500 presses that mold pipe fittings.
Kwok said Liansu already has NSF International safety certification and hopes to get other necessary qualifications soon. He is based in Hong Kong but previously lived in Canada for six years.
The 21-year-old company extrudes pipes out of PVC, polyethylene, chlorinated PVC, cross-linked polyethylene and polypropylene. Its product portfolio also includes aluminum-PEX and aluminum-polypropylene pipes.
In order to break into the competitive U.S. market, Liansu plans to offer 5-10 percent lower prices than U.S.-made products.
The ability to offer low price on a difficult-to-ship product category does not come from savings on resin. Kwok said PVC is more expensive in China than in the United States. He said PVC sells at about $1,043 per ton. Machinery-wise, Liansu makes extrusion lines for its own molding plant.
The machinery business, namely Guangdong Liansu Machinery Manufacturing Co. Ltd., also aims to expand its sales in North America, where the company sold two to three extrusion lines in 2005. Kwok said Liansu has three distributors in the U.S.
``There is a lot of potential for Chinese machinery makers to get active here, once they improve post-sale services,'' Kwok said. Liansu uses remote-access computer technology to support and service overseas customers.
The company is selling more than 140 extruders every year to customers in Eastern Europe, Russia, Saudi Arabia, Colombia and Peru.
Privately held Liansu claims to be one of the largest manufacturers of plastic product and extrusion equipment in China.