Plastics News visited with China's leading press manufacturer, Ningbo Haitian Plastic Machinery Group, at the recent Chinaplas trade show in Guangzhou. Haitian Executive Vice President Helmar Franz commented on how the global downturn has impacted the industry and the company's response to changing markets, as well as other hot issues.
At NPE, the Ningbo, China-based company is represented by Absolute Haitian Corp. of Worcester, Mass. (Booth S50031).
Q: How has the recession changed the market?
Franz: Over the past months, people have become more focused on price to value ratio, less on emotional factors such as the origin of the machine. Nobody can afford to pay more [than needed] at such difficult times. Their rational decisions, in my opinion, have become more important.
By the way, our new all-electric machines are attracting many customers at this show. As you know, the Japanese suppliers are not here.
Q: What's your take on India's decision to impose anti-dumping charges on Chinese presses?
Franz: It doesn't help the Indian plastics industry. I very much regret L&T Demag's move [to file the complaint that led to the dumping charges]. Even their local competition [in India] didn't join them in the petition for the anti-dumping case. This is already showing how isolated they are in this move. And the Indian processors are opposing the decision. How can the Indian government justify its decision? I really don't get it.
[Editor's note: Since this interview took place, Chennai, India-based L&T Demag Plastic Machinery Ltd. was acquired by Larsen & Toubro Ltd. of Mumbai.]
The procedures have also been quite confusing. We were told that the government was going to collect more information, hold one more public hearing and then make a final proposal. But all of sudden, the notification came out and the anti-dumping charges were already put in place.
Our customers [in India], of course, are extremely disappointed. Haitian doesn't have a plant in India. At PlastIndia [in February], we announced a possible cooperation with our partner to assemble some machines locally.
We said the first machines will be assembled this year. But this cooperation was designed and sealed long before the anti-dumping investigation even started, and was never connected to the anti-dumping issue at all or designed to counter the anti-dumping charges. But now we are a little bit concerned. We need to think about it.
One thing is clear: the Indian market is extremely important. India is a great country with tremendous potential. We will try to find a solution to overcome this for the benefit of both countries.
Q: In the face of the global crisis, some global suppliers have said that they are marketing their products in China for lower prices. Is Haitian taking a similar approach by introducing the Tianjian line?
Franz: To sell the same products for lower prices, or to come up new products that are more affordable, these are two completely different stories.
The reason we launched Tianjian was the same reason we launched the high-end Zhafir brand. When companies grow to a certain scale, many tend to focus on the mass market and lose the low and high ends. Haitian, however, is poised to cover the entire market, from the basic applications to the very high end. We want to deliver that message.
Our Tianjian division operates in a separate manufacturing facility with a dedicated engineering, sales and managerial staff. Tianjian offers low price and high quality. Quality is not connected to the level of applied technologies. Low-tech machines can also be of high quality.
Q: Are you seeing a rebound in orders?
Franz: As you know, in China, we had the worst situation in the fourth quarter of 2008. It was mainly caused by a tax policy change.
All purchases of domestic machinery on or after January 1, 2009 get a reimbursement of value-added taxes. Customers were holding off on their purchases.
After the Chinese New Year, business started to get better every month. In April, we reached about the same level as last year. So the first-quarter results will be not so bad. But of course, first quarter exports were not as good as last year, perhaps 30 percent down. But it already picked up in April.
We are paying more attention to evolving markets around the world, such as Southeast Asia.
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