Hong Kong-based Cosmos Machinery Ltd. is planning to boost its capacity 30 percent, to 6,000 injection presses a year, as the company unveils new technology to help it expand into higher-end markets.
Cosmos, which claims to be China's third-largest press maker, is spending more than HK$100 million (US$12.8 million) to build two new factories, in Dongguan and Wuxi, by the end of 2008, company officials said at Chinaplas, held May 21-24 in Guangzhou.
Publicly traded Cosmos also unveiled several new machines, an injection molding compounder for China's growing automotive market, a triple-screw extruder and a foam injection molding unit. The firm's strategy is to move into higher-value markets and rely less on the lower-cost machines dominating China's domestic scene.
``In China, if you want to boost your turnover and sell machines you can, but there's no profitability,'' Executive Director Richard Yan said in a May 21 interview at the show. ``This technology can bring us into a different market segment.''
The new plants replace the firm's existing ones in the same cities, Yan said. He added that Cosmos will shift the focus of the Wuxi plant to making presses with more than 2,000 tons of clamping force, while Dongguan will produce smaller machines, typically less than 1,500 tons.
Construction will begin in September in Dongguan, and get under way in Wuxi early next year. Cosmos plans to reserve some acreage in Wuxi for future expansion.
Cosmos has been spending more on research and development, which contributed to margins falling slightly last year even as overall profit rose 14 percent, according to the firm's annual report.
Yan said Cosmos believes it is the third company globally to introduce a combination injection press and compounding machine. Munich, Germany-based Krauss-Maffei Kunststofftechnik GmbH and Husky Injection Molding Systems Ltd. of Bolton, Ontario, are the other two, he said.
South China University of Technology in Guangzhou developed the technology, and Cosmos commercialized it, he said. The firm signed a strategic alliance with SCUT in December for developing equipment and training staff.
Cosmos sees market potential for the combo machine in areas like automotive, where glass-fiber composites previously had to be manufactured by a resin maker and shipped to the molder. Adding glass fibers in the compounder at the injection stage will cut costs, and allows for fibers up to 5 millimeters to be used, for stronger parts, he said. The process also can accommodate organic additives such as bamboo fibers, he said.
Cosmos initially is targeting the machine, which uses its triple-screw extruder, at domestic Chinese auto molders. It is easier for the firm to target domestic firms, Yan said, than convince foreign carmakers in China to adopt new technology, because foreign firms often make those types of decisions at their headquarters, not in China.
Cosmos developed its triple-screw extruder with SCUT, as well. Yan said the machine can double the output of twin-screw units, and provides better mixing with less shear. The extruders run in parallel, he said.
The firm plans to begin building 4,000-ton presses next year, Yan said. Also, it will open a service center in Toronto, its fourth outside China, the result of having secured a HK$100 million (US$12.8 million) order for 50 injection presses from a large supplier to Ford Motor Co. in Canada. It's the largest single order in the firm's history, he said.