The severe overcapacity of China's biaxially oriented polypropylene film market in the past five years finally has passed. Bruckner Maschinenbau GmbH & Co. KG, the predominant BOPP film equipment supplier, said the market has turned around and is growing 12-15 percent annually.
Sales director Markus Gschwandtner said 2006 was the turning point. ``Profitability has come back [to film manufacturers]. ... We've been very successful.'' He said Bruckner claims a 90 percent market share in China.
The market for film stretching machinery goes through cycles. ``Our company is on an upward trend to the next peak of sales,'' he said at Chinaplas, held May 21-24 in Guangzhou.
Gschwandtner said Chinese film producers learned from the last cycle. ``They see the market change, they decide to invest now and understand that they'll see the return later,'' he said. BOPP film machinery requires a lead time of 1½ years.
Siegsdorf, Germany-based Bruckner supplies BOPP film lines with annual capacity up to 66 million pounds.
The China Plastics Processing Industry Association in Beijing said China's 2006 output of BOPP film reached 3.7 billion pounds, up 5.6 percent from the previous year.
The industry has upgraded through capital reconstruction and technological improvement, CPPIA President Liao Zhengpin said May 20. As larger companies grow, a 63-company survey shows smaller players are going out of business, he said.
However, Bruckner's focus in China in the second half of 2007 is packaging-grade biaxially oriented PET film, Gschwandtner said. The global capacity of BOPET is nearing 5.5 billion pounds, compared with 13 billion pounds of BOPP.
Following the re-emerging BOPP and BOPET markets, biaxially oriented polystyrene film also is coming back on the global market, Gschwandtner said. Thin-layer food packaging, PVC shrink film, polystyrene and glycol-modified PET products also perform well.
``We also see good growth in optical film used for flat-panel displays,'' he said. Japan and South Korea, accounting for the majority of global demand for laboratory film stretchers, demand film of bigger size, better quality and larger quantity, he said.
The company already has sold four BOPP film lines in China and two in Japan this year, according to the company's Web site.
Gschwandtner said Chinese film producers are striving to consume less energy and reduce greenhouse gases.
Bruckner exhibited at Chinaplas along with Kiefel, which Bruckner acquired at the end of last year. Kiefel AG added 600 employees and 120 million euros ($161 million) in sales to Bruckner Group, making the total head count 1,100 and annual sales 250 million euros ($336 million).
Also in 2006, the firm formed Bruckner Biotec GmbH, helping to design turnkey biogas plants. ``Although plastic consumption is still rising, we need to think about the life cycle of the plastic industry,'' Gschwandtner said.
Bruckner employs 80 in China, including manufacturing staff for some components. It opened a sale and service office in India last fall.