China's largest injection press maker, Haitian International Holdings Ltd., said that a record-setting second half of 2009 pushed sales up 4.5 percent for the year, to 3.86 billion yuan (US$566 million), as new products boosted its share of China's expanding market.
At a March 24 news conference in Hong Kong, executives took a rather bullish stance, saying that they plan to invest US$4 million in a new factory in Vietnam this year to serve Southeast Asia and that they expect continued solid prospects in China.
In China the growth is still there and the growth momentum is very strong, said Zhang Jianming, executive director and CEO, speaking through a translator. Overall, I don't think there is a bubble in the market.
Full-year 2009 profit rose 11 percent to 450 million yuan (US$66 million), with 339.7 million yuan (US$49.8 million) of that coming in the last six months.
Haitian said second-half 2009 figures were a company record for both half-year sales and profit, with sales hitting 2.48 billion yuan (US$363.8 million). That's about 20 percent above the pace the company was experiencing before the economic crisis in the second half of 2008.
The company credited robust demand in China's construction, household appliance and automobile industries.
The strong second half overcame a dismal first half that saw sales plummet to 1.37 billion yuan (US$201 million).
We believe that the worst of the financial crisis is over and the global economy is on the right track to a sustainable recovery, Haitian said in its earnings report. There is a clear sign of continued economic recovery from recent economic data, which indicated the rebound in global manufacturing activities.
The company said sales in the first two months of 2010 reached 863 million yuan (US$126.6 million).
Haitian's executive director, Helmar Franz, said the economic downturn was an opportunity, because it allowed the company to increase its market share in China.
Haitian now claims 25 percent of China's injection molding machine market, measured by revenue. In 2008, the firm said it wielded 16 percent of the Chinese market. The figures include both Chinese-made and imported machines.
Franz said the company based those calculations on extrapolations of data from the Beijing-based China Plastic Machine Industry Association (CPMIA), and he cautioned that the figures should be considered estimates indicating broad trends.
Franz said Haitian's market share rose quickly because of the steep decline in sales of imported plastics machinery, including injection molding machines, in China.
Imports of all types of plastics machinery accounted for 52 percent of China's sales in 2008, measured by revenue, but that fell sharply to 30 percent in 2009, according to Haitian.
Franz said locally made machines made gains in China for two reasons: Molding companies that typically buy imported equipment cut back as markets in developed countries dried up, and Chinese equipment continued to close the technology gap with imported machines.
He said he thought Japanese firms lost a lot of market share, and he predicted that while imports will recover some losses, the situation gives Haitian and other Chinese firms an opportunity for new business.
As an example, Franz said Haitian last year sold 20 presses to Singapore-based contract manufacturing giant Flextronics International Ltd. for its factory in Zhuhai.
Haitian said CPMIA statistics show that sales of domestically made machines grew in China last year, rising more than 20 percent to 20.6 billion yuan (US$3.02 billion). Sales of imported plastics machinery, on the other hand, fell more than 50 percent, from 17.95 billion yuan (US$2.63 billion) in 2008 to 8.61 billion yuan (US$1.26 billion) last year.
Excluding imports, Haitian was able to boost its market share modestly among Chinese-made presses sold in China, from 33 percent in 2008 to 35 percent last year, Franz said.
He said Haitian believes its market share in China will grow when the company more fully unveils its line of budget machines, named Tianjin, targeted at developing markets like China.
Those markets need simpler machines capable of making parts for less expensive versions of consumer goods such as refrigerators and consumer electronics targeted at developing economies, Franz said.
The company said its growth reflected a strategy of developing new products, including its Mars series of energy-saving machines, and a new energy-saving model, the Pallas, that it plans to introduce at the Chinaplas show in Shanghai next month.
He said Haitian continues its international expansion, with plans to establish a factory near Ho Chi Minh City, Vietnam, by the end of this year. The operation will include about a half-dozen engineers for adapting machines to local markets and will look for opportunities to outsource components locally, he said.
Franz said the company wants to establish production in more markets, in part to generate local employment in the face of what he said was the possibility of rising protectionism.
Haitian opened a subsidiary in Germany last year to make its all-electric Mercury line.
The company said export sales, which account for about 30 percent of its business, were still 20 percent below pre-crisis levels in the second half of last year, but it expects export sales globally to recover fully in 2010, even if not in all markets.
There are some export markets that remain difficult, according to Haitian.
The Indian market is tough because of that government's decision to impose anti-dumping duties on Chinese machines last year, Franz said.
The company disagrees with India's assessment that it dumps molding machines at less than cost because Haitian is publicly traded on the Hong Kong Stock Exchange and its financials are open, Franz said.
While Haitian continues to sell some machines in India, the firm said the anti-dumping decision has it concerned about other decisions the Indian government might make if the company were to invest there.
I would strongly at the moment oppose any investment in India, Franz said. It is a huge market for the future, but also for China a difficult cultural issue.
The company is not clear if it would be able to export to India from its future Vietnam factory without duties, he said.
Copyright 2010 Crain Communications Inc. All Rights Reserved.