Demag Plastics Machinery Co. (Ningbo) Ltd. wants to turn its China injection press assembly plant into an export base to Southeast Asia and South America, and aims to have about one-third of its production shipped overseas within two years.
That would be a big change from the less than 5 percent that is exported now from the factory, which is part of Japanese-German press maker Sumitomo (SHI) Demag Plastics Machinery GmbH, based in Schwaig, Germany.
The move comes as the company is adding larger-tonnage injection molding machines in Ningbo, to compete in growing Chinese markets like automobile manufacturing, according to Stephan Greif, chief executive of Demag Ningbo.
Even with the export push, the company is still focused on China, and Greif said strong demand within the country is expected to push production in Ningbo up to 650 machines this year, up from the previous record of 500 in 2007. The near economic meltdown pushed its China production down to 320 injection presses last year officials said.
Greif said he wants to boost exports to balance the ups and downs in China.
The fallout of the economic crisis and rising costs in China are changing the kinds of production done in China by Demag customers, with more of the lower-level production leaving the country and demand driven more by internal growth and higher-value production, Greif said.
[Nobody comes] to China anymore for cheap labor, he said. People who come now come only for the market.
He said the economic challenges have led to big changes in the makeup of the injection molding machine industry in Ningbo, which is one of China's centers of press manufacturing. There were about 150 press makers in Ningbo before the crisis 18 months ago, but only about 45 remain, Greif said.
Those companies could not adjust, they could not increase their technology, he said. This is a very clear picture.
Demag is also dramatically expanding the range of machines it makes in Ningbo, previously in the range of 50-250 tons.
The company has been gradually adding machines this year at 280, 350, 420 and 500 tons, and plans to start making 650-ton machines this month and 800-tonners by year's end, Greif said.
Historically, about two-thirds of the 2,600 Demag Ningbo machines sold in China have been in electronics and telecommunications, which take smaller machines.
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