With the beginning of operations at a new plant in Shanghai in February, the city welcomed not one but two auxiliary equipment manufacturers. Rapid Granulate Machinery (Shanghai) Co. Ltd. and Conair Group Inc. jointly occupy the facility, hoping to shorten lead times and gain better access to China's market.
``This should be the hub for Southeast Asia,'' said Kenneth Gustafsson, Asia general manager for Sweden's Rapid Granulator AB, parent company of Rapid Granulate Machinery (Shanghai). ``Before, we were more like a niche player in Asia - we had relatively high prices and a long delivery time.''
The two companies are owned by International Plastics Equipment Group Inc. of Pittsburgh, allowing them to develop the 32,300-square-foot plant jointly. Rapid will produce its line of granulators, while Conair will bring in its drying and materials-handling machines. Conair long has sold Rapid granulators to customers seeking a package of auxiliary machines, said Christopher Keller, president and chief operating officer of Pittsburgh-based Conair.
``Our first shipment will be sometime this summer,'' Keller said of the plant. ``We occupied the building starting in February.''
The plant will not open officially until August, when production will be in full swing.
The firms decided to open the factory to serve their Chinese customers. About 98 percent of the granulators produced by Rapid will be sold to Chinese clients, Gustafsson said at Chinaplas, held May 21-24 in Guangzhou.
When Rapid operated from distant factories, equipment was slow to arrive in China, said Bengt Rimark, marketing manager for Rapid Granulator. Company representatives were not always at hand to advise customers on how to integrate the equipment into their manufacturing process.
Rapid will be sourcing motors and electronics locally, but will continue bringing in its cutting technology from Sweden.
``We put 45 million euros [$61 million] into our production plant in Sweden to make it the hub for the heart of the machine,'' he said. ``Our plant is now operating 24 hours a day, seven days a week.''
Rimark attributes the boom in demand to Rapid's expanding Asian market and to three recently launched products. The company's 300, 400 and 500 granulator series are designed to provide easy access to the core of the machine for cleaning and maintenance.
``We've launched in America and Europe and now we're launching it in Asia,'' he said.
Conair is starting with only two machines and when the plant opens, will source components mainly from Taiwan and the United States. Over time, the balance will tip in Asia's favor, Keller said.
``In 12 months or so we will ramp up the China value,'' he said.
While both companies acknowledge competition is stiff in China, they said they believe their position in the market is strong.
``We do not aim to be the lowest-cost provider,'' Keller said. ``We have to continue to innovate and know the application better than anyone else.''