Hong Kong's Cosmos Machinery Enterprises Ltd. had a tough 2008, like many in China's plastics equipment industry, but the firm is pressing ahead with investments in new plants in China and pushing energy-saving models that are becoming standard there.
Cosmos, which makes between 4,000 and 5,000 injection molding machines a year, is one of China's largest press makers. But the firm's 2008 machinery sales fell 17 percent, to HK$806 million (US$103.5 million), and operating profit plunged 46 percent, to HK$44.3 million (US$5.71 million).
The financial downturn also caused Cosmos and Japan's Ube Machinery Corp. Ltd. to cancel a planned joint venture manufacturing plant in China, first announced in May 2007. In a statement, the companies blamed the financial crisis for significantly reducing demand for their machines, as well as the rising price of steel in the first half of 2008.
The persistent unfavorable market situation has put the joint venture company in a difficult position for ongoing vitality, the companies said. However, both firms said Cosmos will continue to make Ube machines at its Wuxi factory, and they remain committed to a long-standing technology transfer partnership.
Cosmos also is moving ahead with new factories in Dongguan and Wuxi, with plans to improve manufacturing and accommodate future growth, the company said at Chinaplas 2009, held May 18-21 in Guangzhou.
Meanwhile, it has introduced new energy-saving models and developed its own patented servo-driven pumps, reducing its reliance on Japanese components for that key technology.
Simon Ho, director of marketing and international trade, said energy-saving machines are becoming the new version of the general-purpose machine in China. At Chinaplas, the firm launched its Se 90 model servo-driven series that can reduce energy consumption by 40 percent, compared with variable displacement pumps.
Last year Cosmos became the first Chinese press maker to introduce a 4,000-ton, two-platen machine with direct hydraulic clamping, in its attempt to make inroads in the large-machine market, Ho said in an interview at Chinaplas. Until recently, that market in China was dominated by overseas press makers, he said.
The machine is targeted at China's auto industry, where Cosmos is seeing a strong impact from the country's domestic automobile stimulus program, Ho said.
Cosmos' markets in Guangdong province, in export-driven South China, have been particularly hard hit, he said.
Ho said the Chinese economy appears to be improving but he was very cautious: It looks like it is getting better but we are not sure. Machinery is capital intensive and buyers still hesitate.
Cosmos' machinery business was its most seriously hit segment, said the firm, which also runs a plastics unit making tableware, food packaging and other plastic products.