Chinese pipe maker Chinaust Group Corp. is building two new factories in Shanghai to meet growing demand in the automotive tubing, and water and natural gas pipe distribution markets in China.
The Zhuozhou-based firm said it is investing 70 million yuan (US$9.96 million) in the expansion, which will let it bring some Swiss technology for pipe fitting manufacturing to China, said Chinaust Chief Executive Officer Bangying Ren.
The automotive plant will extrude tubing for fuel lines, brake lines and other products, while the second facility will injection mold pipe fittings, which will utilize electro-fusion joining technology from Schaffhausen, Switzerland-based pipe maker Georg Fischer AG.
Georg Fischer owns 50 percent of Chinaust, with the other 50 percent owned by China's Hebei Ling Yun Industrial Corp. Ltd. Chinaust began operations in 1988, but Georg Fischer did not acquire its stake until 2000, when it bought Australian firm Industrial Pipe Systems Co. Pty Ltd.
Chinaust claims to be the largest maker of gas distribution piping and automotive tubing in China, with sales last year of 1.2 billion yuan (US$171 million).
The two new Shanghai operations have been working from rented facilities since March 2007 but will move into new factories the company is building in Shanghai this year, Ren said.
Chinaust had been using its own version of the electro-fusion technology in its fittings, which involves putting a wire inside the fitting to make it easier to heat the plastic and join pipes. The electro-fusion technology from Georg Fischer will make its production more reliable and efficient, Ren said.
The two Shanghai factories had combined sales of about 150 million yuan (US$21.3 million) last year, with 100 million yuan (US$14.2 million) from the automotive plant, Ren said.
The firm's other major market is water distribution pipe. Ren said it is not the market leader in water piping, because Chinese firms sometimes choose cheaper pipes.
But he said as the country faces more water shortages from its rapid development, Chinese governments and companies will be interested in buying better quality water pipe to cut down on leaks and lost water.
``Water is very valuable in China. It is more responsible to improve the water distribution system, rather than find new sources of water,'' Ren said.