China's largest domestic compounder, Guangzhou Kingfa Science & Technology Co. Ltd., started production of its fourth facility May 18.
The first phase of the new plant is built on 13 acres of land on a 144-acre campus near Guangzhou. District manager Chen Guoxiong said the company plans to add manufacturing space gradually on the large-scale campus.
The new facility houses more than 500 workers and 20 extrusion lines. Depending on market demand, Chen said, another 20 lines can be added quickly.
Kingfa said it was China's first domestic compounder to be listed on the stock market, with an initial public offering that was completed in June 2004.
In addition to two plants in Guangzhou, the company also has a production facility at Shanghai and a plant at Mianyang.
The Mianyang facility primarily supplies molders of television parts.
Kingfa's portfolio includes five series of compounds, 60 categories and 2,000 grades. While the firm serves industries across the board, appliances are currently its largest end market, representing 20 percent of the company's sales. Automotive, with a share of 15 percent, is growing faster than other applications.
The company runs 130 extrusion lines in total and employs 1,500 in Guangzhou, 700 in Shanghai and 200 in Mianyang. The group's annual capacity reaches 882 million pounds.
Chen said the company has been growing more than 20 percent annually and the strong growth will continue the next few years.
``We strive to discover new areas for new growth,'' Chen said. ``We aim to develop higher-value-added products and catch up with Western counterparts''.
Leading the Chinese domestic compounding industry, Kingfa has less than 10 percent of the market share. Chen said multinational resin suppliers control more than 85 percent of the Chinese market.
Kingfa's research and development staff of 150 includes seven academicians from the Chinese Academy of Engineering, 60 researchers with master's degrees and 38 with doctorates. The company has established material research centers with institute partners including the South China University of Science and Engineering and Sun Yat Sen University.
Kingfa recently commercialized production of the degradable resin polybutylene succinate (PBS) after two years of R&D, Chen said.
While expanding its domestic business, Kingfa also is exploring overseas markets. Chen said the company's flame-retardant products have passed Underwriters Laboratories Inc. certification.
``The markets in China are very dynamic,'' Chen said. ``We are already seeing molders of TV parts move to Malaysia in order to get around trade barriers.''
Regardless of the volatility in upstream and downstream markets, Kingfa has delivered consistently good financial results. From startup sales of $138,000 in 1993, the company has grown to $682 million in 2006.
Kingfa reported 88 percent growth in profit for fiscal 2006, when sales increased 35 percent.
The Guangzhou-based company said it expects to reach $1.96 billion in sales by 2010.