U.S. imports of Chinese building products are growing rapidly, at the expense of vinyl siding, windows, decking and other products from other countries, including the U.S., an investment banker said at the Plastics News Executive Forum.
Michael Collins, at Chicago-based Jordan, Knauff & Co., has coordinated research into the window and door industry and leads the firm's efforts in raising capital and mergers-and-acquisitions advising for firms in that sector.
China is the largest importer in only one construction category - plastic flooring, Collins said at the March 10-12 event in Tampa. In other product segments, other countries still ship more to the United States. But China is growing swiftly in windows and doors, siding, fencing, decking and railing, and bath products, he said. The same goes for architectural columns, cement and glass. It is only a matter of time until China becomes the No. 1 importer in many of those categories, he said.
The country shipped nearly $13 billion in building products to all countries in 2006 - nearly four times more than 2001.
In exports, China is strongest on products with long production runs that can be shipped efficiently, such as window and door hardware and extrusions, Collins said. He added that Chinese companies often will give away tooling to win new business.
On the other hand, he said Chinese manufacturers are not addressing all the needs of their home market. Large U.S. suppliers may be able to capitalize on selling some products there, such as windows and doors and equipment for heating, ventilating and air conditioning, he said.
To protect their turf, U.S. manufacturers can develop unique, differentiated products that use advanced technology, he said.
But the march to China is likely to continue.
Even private equity funds are opening offices there, Collins said. One reason, he noted, is when a for-sale U.S. company puts together financial documents for potential buyers, the fund managers can share details with their counterparts in China.
That lets officials determine how much in costs the private equity fund could take out if they buy the company - and move work to China.