Husky Injection Molding Systems Ltd., with two factories in China, is poised to capitalize on the explosive growth of food and beverage consumption - and plastic packaging - by China's 1.4 billion people, company executives said at Chinaplas.
``The market's growing rapidly, along with the economic boom, and we're very excited about it,'' said John Galt, president and chief executive officer.
Husky is the largest manufacturer of injection presses to mold PET preforms. The average per capita consumption of bottled water in China is only 2 or 3 liters a year, just a fraction of the consumption in North America and Europe of about 50 liters, Husky officials said.
In developing countries, food packaging is one of the first plastics end markets to take off. China is following that path.
``Our experience is that it will follow the growth in [gross domestic product]. Growing GDP generally creates an emerging middle class with disposable income. That drives consumption, consumerism, and one of the first things ... purchased is packaging,'' Galt said.
Husky, based in Bolton, Ontario, employs more than 400 people at its factories in China. Husky's Asian headquarters plant in Shanghai opened in 2004. About 320 people work at the operation, which assembles hot runners, and injection molding machines in clamping forces up to 500 tons.
Husky opened the smaller Shenzhen hot-runner plant in 2005.
Galt said the Shanghai factory makes most of Husky's small-tonnage presses. In the past, Husky officials have said that China would be the center of small machines, which are easier to ship around the world. But the voracious demand in China has delayed that plan.
Husky Asia-Pacific President Gerardo Chiaia said the company exports very few China-made machines out of the region - and even imports some from operations in other countries, coordinating with the entire Husky global organization.
``We cannot get the capacity. Not all of the capacity of Asia Pacific is built in China; it's not possible because of the growth,'' Chiaia said.
Part of the manufacturing is done in Luxembourg and Bolton.
``We export a few systems when we have global capacity, and we share the capacity,''he added.
Galt said the Shanghai plant builds small and midsized presses for packaging and PET preforms, and hot runners.
In other markets, Husky also has targeted a wider audience among technical, automotive and general-purpose molders. But Husky will remain highly focused in China, he said.
``The pipeline is very full today [in Shanghai] and we try to focus on driving more standard product lines through the facility, as we train and develop the people,'' Galt said. ``Having enormous variety of equipment going through one line obviously reduces its efficiency. So what we try to do is focus on the markets where we get the greatest amount of volume and standardization, so that we can drive better management of our working capital and get people more trained on the product.''
Husky ran two machines at Chinaplas. A Hylectric 400 press cranked out more than 1,900 bottle caps per minute - new closures weighing less than 1.8 grams. Husky also molded PET preforms on an eight-cavity HyPET.
The preform press showed the Flex Mold setup, which allows for fast mold changes. Chiaia said that's an important feature in developing countries in Southeast Asia and in India, as bottle molders need to run a full range of sizes, including some in smaller volumes.
In China, the Beijing Olympics are driving some investment in special packaging, said Chiaia, an Italian who was promoted to Husky's Asia chief in mid-2007, replacing Marcus Sutch. Chiaia started at Husky 14 years ago as a service technician, then worked his way up.
``But people are putting in capacity behind the Olympics, because the people are earning more money,'' he said. ``They're spending more. They're becoming more health-conscious. It's not just the [soft drinks], but water, tea, all the health beverages.''
At Chinaplas, held April 17-20 in Shanghai, caps and preforms rained down from the Husky presses.
China is all about volume. Chiaia points to the noodle cup, an everyday staple. Today they're made of paper or foamed polystyrene. But Chiaia, who loves to browse the grocery store aisles while his wife does the shopping, can imagine a China full of injection molded noodle cups - molded on Husky machines, of course!