Century Extrusion has acquired one of China's largest extruder manufacturers, Nanjing Ruiya Polymer Processing Equipment Co. Ltd., in a move to build a global profile, boost market access in China and cut manufacturing costs.
Traverse City, Mich.-based compounding extruder maker Century announced the deal Oct. 25. The firms have had a technology and marketing partnership since 2004, but Century said the purchase would combine its strength in service with Ruiya's sizable manufacturing base of twin-screw extruders and other equipment.
``We want to take Century from being a North American-centric company into a globally capable supplier,'' said Century President Bob Urtel in an interview at the K 2007 trade fair in Dusseldorf.
``It is important for our customers to know we have resources to take care of the big guys and support the up-and-comers,'' he said.
Terms were not disclosed.
Ruiya, in Nanjing, is the largest Chinese-owned manufacturer of extruders in China. The company said it makes about 300 machines per year.
China's largest extruder production base belongs to Coperion Keya (Nanjing) Machinery Co. Ltd., a subsidiary of Coperion Werner & Pfleiderer GmbH & Co. of Stuttgart, Germany. The Chinese unit was formed in 2004 when Coperion bought Keya Corp. of Nanjing.
Ruiya expects Century to help it upgrade its product portfolio, expand its geographic map, and boost overseas sales volumes.
``Our advantage is the capability to offer products with good value for the prices,'' chief engineer Zhang Hongge said at the K show. ``But we have also a weakness when it comes to manufacturing higher-end machines, in terms of the use of material, processing techniques, etc.''
Zhang said Ruiya is preparing to release a new, more advanced machine at the next Chinaplas, to be held in Shanghai in April 2008.
With a monthly output of 20-30 lines, Ruiya claims sales have been around 100 million yuan ($13.4 million) for three years and the workforce also has been steady at about 240 people.
``Globalization has been the trend,'' Zhang said. ``We would like to play in the global market.''
Right now, about 30 percent of Ruiya's sales come primarily from export markets in Asia. The company has maxed out production capacity at its 54,000-square-foot facility in Nanjing.
Nanjing is known in the plastics industry for its heavy concentration of manufacturers of compounding extrusion lines. ``Probably 90 percent of the nationwide capacity is clustered in Nanjing. The competition heats up and low-end extruders are oversupplied,'' Zhang said.
Century will maintain manufacturing at its 100-employee U.S. headquarters plant to support North American customers and still wants to grow its business there. That site makes about 50 extruders a year, Urtel said.
One reason for the purchase, he said, is to allow Century to have more control over the more sophisticated manufacturing and metallurgical technology it wants to bring to China, Urtel said.
At the same time, he said the company wants to take advantage of China's lower costs to build cheaper machines, including for North America, and source lower-cost components and materials.
Urtel said the Chinese market also is demanding better technology, as domestic firms try to branch out into global markets.
Century Extrusion was bought in 2006 by diversified global equipment manufacturer CPM Holdings Inc. of Waterloo, Iowa, which said it wanted to internationalize the company.