Determined not to lose a particular, highly specialized resin supply contract seven years ago, Ashland Distribution followed the job's tooling to China, tracked down the molder and secured a deal to continue supplying the material from afar.
The success of that adventure prompted officials at the division of Columbus, Ohio-based Ashland Inc. to consider focusing more on supplying Chinese processors with materials available only in North America.
Those efforts culminated recently with Ashland announcing an aggressive expansion of its China resin distribution network, with new deals to handle materials from five producers - BASF Corp., Clariant Masterbatches, DSM Engineering Plastics, LTL Color Compounders Inc. and Teknor Apex Co.
Ashland Distribution President Ted Harris calls his firm's new portfolio of materials ``just a start.'' In an April 20 interview at his company's Chinaplas booth, Harris said the new relationships provide ``a small, critical mass to get us started. We will ramp up quickly.'' Chinaplas was held April 17-20 in Shanghai.
Ashland Distribution has benefited from its parent firm's China presence. Ashland Inc. employs 460 in China and has invested $100 million in the country over the past 18 months. The firm has offices in Shanghai and Beijing, and manufacturing facilities in Beijing, Changzhou, Kunshan and Nanjing.
The resin distribution business will tap into its parent firm's existing supply chain network of warehouses and logistics vendors, can sell product in U.S. dollars or in the local Chinese yuan currency, and has access to Ashland Inc.'s technical service and commercial centers in the country. The firm also is building a $35 million unsaturated polyester resin plant in Tianjin, in the north of China.
Larry Hunt, Shanghai-based commercial director of Ashland Distribution China, said his unit's latest moves mean it now has a full, in-country model, with a local line card of products and local sales and technical service staff. Hunt explained the three-pronged strategy by outlining Ashland Distribution's different customer constituencies in China:
* Thousands of customers from the North American Free Trade Agreement region and from Europe that know and trust Ashland, and that have China operations.
* Asia-based companies that do subcontract work for Western customers.
* Domestic Chinese producers that are making products for the domestic market, especially for such sectors as automotive, medical and high-end consumer products.
In a highly fragmented market such as China's, Hunt said customers are seeking trusted, established suppliers that offer consistent source of supply.
Under terms of the new supply agreements, Ashland Distribution will sell the following materials in China for its new partners:
* BASF - Ultrason polysulfone, Ultraform acetal and Ultramid nylon 6/6 resins.
* Clariant - color concentrate and specialty additives, under the Remafin, Renol, Cesa, Hydrocerol, Omnicolor and Enigma brand names.
* DSM - Akulon nylon 6, Arnite PET and polybutylene terephthalate, Stanyl nylon 46 and Arnitel thermoplastic copolyester elastomer resins.
* LTL Color - custom-compounded products, including Ecofast recycled-content resins.
* Teknor Apex - vinyl compounds, with an emphasis on the medical-device market.