Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Videos
    • Podcasts
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Notable Leaders in Sustainability
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics Caps + Closures: A Global Online Event
    • Women Breaking the Mold Networking Forum
    • Bioplastics Live
    • Numbers that Matter Live
    • PFAS Live
    • Plastics in Politics Live
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Resin Prices Overview
    • Commodity Thermoplastics
    • High Temperature Thermoplastics
    • Engineering Thermoplastics
    • Recycled Plastics
    • Thermosets
    • Europe - Virgin
    • Europe - Recycled
    • Europe - Feedstock
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
November 07, 2007 01:00 AM

Kingfa unveils ambitious plans, new products

  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    DÜSSELDORF, GERMANY (Nov. 7, 5:10 p.m. EST) — Guangzhou Kingfa Sci & Tech Co. Ltd. no longer is satisfied with its leading position in the Chinese compounding industry.

    The publicly held company is determined to build a world-class brand name and highlighted its global vision at K 2007, its first international trade show.

    Chief Marketing Officer Cai Lizhi said the company is considering manufacturing facilities in overseas markets. Possible sites are under planning in Mexico, the United States or Canada, and Europe.

    No definite timetable is available, but the 14-year-old compounder with 1 billion pounds of annual capacity in China expects to start overseas production in three years.

    Kingfa seems to be in a good position to extend its foothold from the Far East to the global market. Sales have been growing more than 30 percent annually for the past three years, reaching $703 million in 2006, and are projected to reach $933 million for fiscal 2007.

    The company operates sales offices in El Paso, Texas; San Diego; Detroit; Toronto; Tokyo; Kuala Lumpur, Malaysia; and Moscow, although 95 percent of business remains in China.

    “Europe and the Americas are indispensible markets,” Cai said in an interview at K 2007, held Oct. 24-31 in Dusseldorf. “We need production facilities on the ground to convince our customers.”

    He said Kingfa is doing business with many multinational companies in China, and he hopes to extend the supplier relationship to these customers' operations outside China.

    The company is setting up an overseas sales department to focus on exports, according to Cai.

    While U.S. compounders PolyOne Corp. and A. Schulman Inc. have been posting single digit profit margins, Kingfa's financial reports show the company's gross margin hit 12.53 percent in 2006, up 2.18 points from the previous year.

    Whether Kingfa will be able to ensure the profitability of manufacturing in North America or Europe, Cai said the determining factor is market scale.

    “If annual volume exceeds 30,000-50,000 metric tons [66 million to 110 million pounds] for the location, it'll make good economic sense for us to open a plant there.” He said the company's sales volume in the target regions are already close to that range.

    Even without local production, Cai said additional cost for an overseas market is bearable. “Freight and tariff add about $100 cost per metric ton for exports.”

    The different packaging practices in different markets — rail cars in the U.S. vs. sacks in China — are less of a problem than some assume. Cai said his company ships large sacks that hold up to 2,200 pounds of resin.

    Kingfa claims to be one of the five largest compounders worldwide, measured by capacity. It has large-scale production bases in Guangzhou, Shanghai and Mianyang.

    Cai forecasted the company to top $2 billion in sales in 2010, narrowing the gap between Kingfa and global leaders.

    That requires the company to improve product mix and raise margins, Cai said.

    “We can't be competitive in the global market with commodity resins. The trend is to develop specialties.”

    Polypropylene, priced lower in the United States than in China, still represents 40 percent of Kingfa's sales.

    China's loose environmental regulations enable the industry to make PVC at very competitive costs, while developed countries enforce higher standards for pollution control and energy consumption.

    But the future lies with more sustainable products, Cai said, such as bio-based resins.

    After three years of research and development, Kingfa is now in the early stages of commercializing its polybutylenes succinate and polylactic acid-based compounds.

    The company has established production facility capable of making 6.6 million to 11 million pounds of PLA compounds annually, based on lactic acid purchased domestically. Similar scale capacity also is set up for PBS, Cai said.

    RECOMMENDED FOR YOU
    Tennessee-based insulation maker adding equipment, jobs
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    National bottle bill ‘could make sense,' senator says
    2
    An 8,000-ton dream for Milacron, 20/20 Custom Molded Plastics
    3
    PS resin prices continue their climb
    4
    Play Mart expanding in Kentucky, adding jobs
    5
    Resin Prices - North America
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Find more newsletters at plasticsnews.com/newsletters.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Notable Leaders in Sustainability
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Videos
      • Podcasts
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics Caps + Closures: A Global Online Event
        • Women Breaking the Mold Networking Forum
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
      • Editorial Livestreams
        • Bioplastics Live
        • Numbers that Matter Live
        • PFAS Live
        • Plastics in Politics Live
        • PN Live: Mergers and Acquisitions
        • Polymer Points Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Resin Prices Overview
      • Commodity Thermoplastics
      • High Temperature Thermoplastics
      • Engineering Thermoplastics
      • Recycled Plastics
      • Thermosets
      • Europe - Virgin
      • Europe - Recycled
      • Europe - Feedstock
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified