DSM Engineering Plastics is reinforcing its focus on China which the company believes will develop into the world's largest engineering plastics market in just three to five years.
DSM's deal to swap its Xantar polycarbonate business with Mitsubishi Chemical Corp.'s Novamid polyamide, which was completed June 1, also is expected to help create more depth into end users especially in China and Japan.
Jayant Dhobley, president of DSM Engineering Plastics in Asia Pacific, said the acquisition includes Mitsubishi's nylon 6/66 business and manufacturing, as well as a number of patents in automotive exterior and other applications. As part of the agreement, DSM has acquired Tai Young Nylon Co. Ltd. in Kaohsiung, Taiwan, with local polymerization capacities for nylon 6/66.
The transaction will strengthen DSM's service to customers in auto, electrical, and flexible packaging markets, Dhobley said. He has been leading the integration of the Novamid business.
The company is establishing a materials research and automotive development center in Shanghai, Dhobley announced at the Chinaplas 2010 trade show, held April 19-22 in Shanghai.
The center will be located on DSM's Shanghai campus, which opened last year as the first LEED-certified (Leadership in Energy & Environmental Design) commercial facility in China.
The R&D center will be DSM's biggest for engineering plastics outside of the Netherlands, according to DSM President Roelof Westerbeek. The first steps starting to help original equipment manufacturers and their Tier 1 suppliers with material development will be completed by the end of this year.
Dhobley noted that China already is the world's largest plastics market. He has been in his current post since 2008, and has successfully steered and grown the business during turbulent economic conditions.
He first moved to Shanghai in 2002 from DSM's India operation to be operations director in the Asia-Pacific region. During the next six years, he was responsible for establishing greenfield manufacturing facilities in Jiangyin, China, and Pune, India.
The Jiangyin compounding facility is a main manufacturing plant for Greater China and Asia, with expansion potential to fit 200 more employees, Dhobley said. The company also runs a development center in Jiangyin for advanced material testing and characterization, for which DSM continues to invest in both hardware and expertise.
The facility in Pune is running at full capacity, Dhobley said, and the company is planning the next phase of expansion by the end of the year.
To meet China's growing demand for environmentally friendly engineering resins, DSM introduced at Chinaplas bio-based high-performance polyamide EcoPaXX that is carbon neutral from cradle to gate.
The EcoPaXX product is designed for under-the-hood-applications, said Dan Bishop, marketing director for compounds in Asia Pacific. Although it's still in early evaluation phase, key customers appreciate the value and the eco-benefits it offers.
The company also touts Stanyl CR a second-generation halogen-free high-temperature polyamide with high flow and Arnitel-branded copolyester for the consumer electronics and wire and cable industries. Both products have been commercialized in China with key customers, Bishop said.
In the electronics manufacturing business, the conceptual, design and engineering work can be done anywhere in the world, but manufacturing is concentrated in China, he added.
DSM Engineering Plastics reported 2009 sales of 648 million euros ($903 million) and employs about 1,600 worldwide.
In China, Royal DSM NV overall is set to achieve sales of $1.5 billion this year, Dhobley said. The company expects its China growth to be two-to-three times the gross domestic product rate, which hit 11.9 percent in the first quarter on a year-over-year basis.
DSM Engineering Plastics is a business unit of DSM NV of Heerlen, Netherlands. The unit's U.S. arm is located in Evansville, Ind.
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