RadiciGroup Plastics and Lati Industria Termoplastici SpA announced plans to approach China's market in tandem, forming a joint venture to focus on the Chinese engineering plastics market.
The venture will be headquartered in Suzhou at the RadiciPlastics Suzhou Co. Ltd. compounding plant. The 140,000-square-foot plant, established in April, is Radici's first in China, although the company has had a marketing presence in the country since 2003.
``[This agreement] will be an excellent opportunity to strengthen our presence in a very promising market,'' said Francesco Michele Conterno, chairman and managing director of Lati SpA, in a statement.
The two Italian companies cited China's growing auto industry and rapidly maturing electrical power grid as a strong reason for their entering China. They believe an increasing demand for high-quality goods in Asia will drive their sales.
Vedano Olona-based Lati specializes in self-extinguishing compounds for electrical and household appliances, while Gandino-based Radici manufactures engineering plastics for the automotive industry.
Initially, many of the products being marketed across Asia will be manufactured elsewhere. While the Suzhou site is producing a line of engineering plastics, many of the products the two companies plan to market do not yet have production lines running in China.
The joint venture will focus on selling engineering plastics to customers in Southeast Asia, focusing on Hong Kong, China, Taiwan and Singapore. Products will be marketed using the companies' corresponding brand names.
While the firms will be linked in China, they plan to pursue their own, separate business strategies in other markets.