Kicking off a large expansion amid a slower growing economy, Chinese recycler and injection molder Fukutomi Co. Ltd. plans a HK$350 million investment during the next three years aimed at diversifying into biodegradable plastics, plastic pallets and other businesses.
The Hong Kong-based firm is finishing up a new factory in Shantou, relocating production from an existing Shantou facility, as it tries to shift away from a business heavily dependent on trading in recycled materials to markets its executives said could be more profitable.
In 2006, the company started injection molding biodegradable products, including cutlery, flower pots and golf tees from polylactic acid, to complement its core business of trading recycled plastic and molding polypropylene cases for compact discs. It plans to expand its business in PLA manufacturing.
``At the moment the economic situation is really critical, and at the same time we also see this as something really sustainable,'' said Managing Director Steve Wong. ``Even with the current [economic] situation, we will still go ahead.''
The company also has purchased two large injection molding machines for making plastic pallets, one with 2,400 metric tons of clamping force and a 2,800-tonne machine, for the new facility, in Shantou's free-trade zone.
Fukutomi has about 60 small injection presses, up to 100 tonnes, for manufacturing the CD jewel boxes.
Wong said the company launched its expansion in 2006, but it has taken time to secure permits and government approvals.
Commercial director Mary Cheung said the firm has been less affected by rising currency and labor costs that are hitting other Chinese exporters, because it often buys plastic in foreign currency and has newer manufacturing operations. But she said Fukutomi is looking to add more automation to boost competitiveness.
Fukutomi also said it plans to add engineering plastics compounding and a mold-making workshop, as part of the expansion.
The company started in the recycled trading business in 1984. Today it still accounts for about two-thirds of the firm's HK$1.7 billion in annual sales, company officials said.