DÜSSELDORF, GERMANY (Nov. 27, 12:10 p.m. EST) — On a visit to his parents, Jens SchrÃ¶der flew from Germany to Changchun, a city in northeast China that is closer to the North Korean and Russian borders than to the country's capital of Beijing.
Compared with the booming manufacturing bases in the Pearl River and Yangtze River deltas in the south, Changchun doesn't find its name as recognizable by Westerners.
But Jens SchrÃ¶der decided to stay. He joined his father, Jurgen SchrÃ¶der, who worked for Siemens VDO Automotive AG as production head in Chuangchun for seven years, until September 2002.
The SchrÃ¶ders analyzed Changchun's unique position in the automotive world and saw opportunity — hence the birth of automotive injection molder Sinoplastics Inc. in 2003.
The cradle of the Chinese auto industry, Changchun is referred to as China's Detroit, housing its largest automaker, First Automotive Works Group Corp., and FAW's joint ventures with Volkswagen, Audi, Mazda and Toyota. It is also less than 200 miles north of BMW AG's Chinese operation, BMW Brilliance Automotive Ltd.
The high concentration of automakers has attracted major auto supplies to set up production facilities in Changchun, including Autoliv Inc., Hella KGaA Hueck & Co., Webasto AG, Mann+Hummel GmbH, Siemens VDO, Delphi Corp., TRW Automotive Inc., Johnson Controls Inc., Faurecia SA, Lear Corp., Grammer AG, Brose Fahrzeugteile GmbH & Co. KG, Intier Automotive Inc., Leoni AG and Mekra-Lang GmbH & Co. KG.
“But there weren't many qualified injection molders to supply to these first-tier companies,” Jurgen SchrÃ¶der said in an interview during K 2007, held Oct. 24-31 in Dusseldorf. That spelled opportunity, SchrÃ¶der said.
Sinoplastics is a wholly foreign owned enterprise, two-thirds of which is held by auto injection molder Hoerauf & Kohler GmbH, based in Augsburg, Germany, and the rest by the SchrÃ¶ders, who independently run daily operations.
It is not as difficult as people think to do business in China without a local partner, SchrÃ¶der said. He said the process “has been very smooth.”
In a 10,800-square-feet production area, the company runs five injection presses from 50-650 metric tons. Three of them are Demag Haitian models and two are Krauss Maffei.
“We are committed to deliver German quality products, so we only use German machines,” he said. And as European companies now make presses in China, it offers convenience for service and saves freight, he noted.
The business has been good, SchrÃ¶der said.
Sinoplastics' customers include Grammer, Webasto, Faurecia and JCI. Its injection molded parts, such as door panels, center consoles, air ventilation grilles, bracket covers and gear knobs, go into VW, Audi, Volvo, Ford, GM, FAW and BMW cars.
While focusing on the Chinese domestic market, Sinoplastics also ships to Germany and Japan.
“We don't turn down export businesses,” he said.
The company uses imported resin, as most customers specify it. For parts that are destined for outside China, the resin is waived for tariff and tax, different from domestic sales.
Sinoplastics will triple its manufacturing space, on a leased basis, by the start of next year, according to SchrÃ¶der. And the firm will add two presses, one with between 100 and 250 tons, and the other between 250 and 550 tons.
The company currently employs 60, including a tooling manager from Germany.
SchrÃ¶der said the company has a close cooperation with Hella KGaA Hueck's Chinese tooling operation, Hella Changchun Tooling Co. Ltd., and Haier Mold Co. of Qingdao. It received ISO/TS 16949 certification (from the German Association for Technical Inspection) in October 2005 and plans to receive ISO 14001 certification in January.
Sales will reach 3.5 million euros ($5.1 million) this year, and he expects them to grow to 10 million euros ($14.7 million) by 2010.
SchrÃ¶der does not regret his decision of setting up the company in Changchun.
“There's too much competition in the south and it is difficult for a small business to start,” he said. Labor costs also are lower in the northern region. But he noted the lack of qualified engineers.
“The Chinese education of engineering is too much about theory, not enough hands-on practices.”
In an effort to help improve the situation, he organized a Chinese-German plastics symposium in Changchun with speakers from BASF AG, Ticona, Demag Plastics Group and Krauss Maffei GmbH. Admission for students was free.
“Maybe they'll appreciate the training and come to work for us,” he said. He plans to hold a second session in the spring.