American equipment manufacturer Parkinson Technologies Inc. said it has sold what will be Asia's largest biaxally oriented polystyrene sheet line, to a newly formed Chinese firm that plans to serve the food-packaging market.
The new Chinese firm, a joint venture of manufacturers China Lamo Electrical Appliance Group and Zhejiang Cixi ShuangFu Group, will begin operations with the high-output line in early 2009 in Ningbo, China.
The line will have annual capacity of at least 44 million pounds per year, double the size of the next-largest BOPS sheet line in Asia, said Peter Termyn, president and chief executive officer of Woonsocket, R.I.-based Parkinson. He spoke at Parkinson's booth at the recent K 2007 trade show in Dusseldorf, Germany.
The two Chinese firms, both headquartered in Ningbo, make electrical appliances and have decided to expand into the unrelated food-packaging business, Termyn said.
``The success of our current core business has allowed us to expand into other strategic areas,'' said Cen Meng Da, owner of China Lamo, in a statement distributed by Parkinson.
Parkinson said the Chinese firms have secured government real estate and machinery import approvals.
The new firm will sell PS sheet to thermoformers for rigid packaging applications such as meat and cookie trays, and clamshell packaging, for China's domestic market.
Termyn said the company believes the BOPS line will be Asia's largest because Parkinson's equipment is used to manufacture more than 50 percent of the world's BOPS sheet and film, and it has sold the majority of the eight BOPS lines currently in mainland China.
The last BOPS line was sold in China 12 years ago, but the growth of China's domestic market for food packaging is leading to new investment, said Alman Chow, manager of Parkinson's office in Shenzhen, China.
The domestic market is growing 25 percent a year, and causing some of the company's Chinese customers to focus more on domestic sales, increasing the percentage of their business targeted for their home market from 30 percent of sales to about 50 percent, Chow said.
``Right now there is a pretty good opportunity for new market entrants,'' said Termyn.
Termyn would not describe the size of the investment other than to say it was a multimillion-dollar purchase.
Lamo began operations in 1992 and employs about 2,000 making about 2 million water dispensers and 500,000 washing machines a year. ShuangFu manufactures fans, vacuum cleaners and other electrical appliances.