U.S. plastic wine-cork maker Nomacorc LLC has opened a small factory in China, in what it said is the first move by the synthetic wine cork industry into the country's growing domestic wine market.
The Zebulon, N.C., firm, which coextrudes polyethylene-based wine corks in the United States and Europe, is investing less than US$1 million to open a factory for printing custom labels on corks in Yantai, one of China's major grape-growing regions for wine.
But the company anticipates future investment there, as China's domestic wine market is growing 15-20 percent a year.
President and Chief Executive Officer Lars von Kantzow said Nomacorc eventually could extrude corks in China, although he expressed concerns about protecting the intellectual property of its patented technology. For now, the plant will eliminate the six weeks it takes to ship a finished, printed cork to Chinese wineries.
``This is a long-term investment,'' von Kantzow said Jan. 7 by phone. ``Our whole intent is to be here early and build relationships.''
The company claims to hold about half the global market share for synthetic wine corks, von Kantzow said.
China's domestic wine industry makes between 130 million and 155 million gallons of wine a year, about one-third the size of North American wine production, he said. But it is growing quickly and could, by some estimates, reach the size of the U.S. market, now the world's third largest, in about a decade, he said.
Von Kantzow said the company expects growth in China to be slow, at first, but pick up quickly when synthetic corks start to make inroads.
China's wine market lags the world market in use of synthetic corks and closures, he said.
Worldwide, about 20 percent of wine bottles use synthetic corks, but they are a tiny fraction of China's market, which is dominated by a less-expensive natural-cork closure, von Kantzow said. Nomacorc's coextruded low density PE corks have an inner core of foam and outer protective layer.
The firm has active development programs with some of China's largest wineries, he said. Parent Noel Group of Wake Forest, N.C., first set up a business development office in China in 2005.