Liansu Group, one of China's largest plastic pipe makers, has opened a new factory in Nanjing to target growing domestic demand for infrastructure projects.
The factory started in August with about 50 extrusion lines and several hundred employees, and will help the company meet demand spurred by the Chinese government's economic stimulus spending on water, sewer and other infrastructure projects, said Victor Lin, vice president and director.
Liansu is based in Foshan in southeastern China.
Beijing's economic policies amid the global downturn have resulted in many new investments for civil engineering projects, Lin said: The domestic market is very good.
Some analysts have questioned whether China's domestic market expansion can be sustained when spending from the 4 trillion yuan ($586 billion) government rescue package slows down.
But Lin said Liansu is not seeing any signs of a pullback in funding for projects, and sometimes cannot supply enough to meet market demand.
The company also has broken ground on new Chinese extrusion plants in the northeastern city of Daqing and the northwestern city of Urumqi that it expects to complete within two years.
Acording to a government Web site, the Daqing plant would have annual capacity of 331 million pounds, but Lin said that figure is too high. He declined to say what the actual capacity would be.
The firm also is planning a pipe factory in the city of Xi'an in central China, but work on that project is not as far along, Lin said.
Export markets remain weak, and as a result, he said, the company is putting more focus on the domestic market something of a switch from the dramatic 2007 plan Liansu had announced to export significant amounts of smaller plastic pipe to the United States.
That announcement attracted attention in the American plastic pipe industry, but Lin said transportation costs and U.S. standards became obstacles.
The company has launched several new products and expanded into new markets in the economic downturn, developing polybutylene pipe, a drainage system with new fitting designs, and a composite water and gas pipe made from plastic and galvanized steel.
The firm also this year launched a business making metal water faucets and related equipment, he said.
Lin spoke during an interview at the Canton Fair, which attracts more than 160,000 visitors.
The fair kicked off Oct. 15 in Guangzhou and runs in three separate phases until Nov. 4.
Liansu makes a wide range of plastic and metal pipe and fittings from polypropylene, PVC, and polyethylene, along with wood-plastic composite decking, windows and doors.
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