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August 09, 2010 02:00 AM

China's rotomolders look to expand

Lauren Hilgers
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    In a search to expand its domestic market and help speed traditionally slow growth, China's rotational molders have set their sights on another of China's still-nascent industries: agricultural machinery.

    While the rest of China's plastics industry has taken off in the past few years, rotomolding has been slow to grow, said Wang Zhanjie with the China Plastics Processing Industry Association in Beijing. “In China, the industry hasn't gotten much support from the government,” said Wang, who is secretary general of the group's plastic pipe subcommittee. “It has had to grow on its own.”

    This has left many rotomolding companies unsure of where they fit in China's booming economy, Wang said at the 2010 China Rotomolding Conference, held July 18-20 in Shanghai. “Domestically, rotomolding doesn't have any obvious leading products. We need to do more research and develop more established, professional applications.”

    Traditionally, agriculture in China has been powered by hard labor and manpower rather than technology. But the industry is growing as China's migrants flock to cities, and farms are left with fewer laborers. A report released this year by Freedonia Group Inc. of Cleveland said demand for agricultural equipment, already a $12.6 billion business, will grow by 6.8 percent through 2012. And the industry could be a perfect fit for Chinese rotomolders.

    “There are good opportunities for the agricultural industry to expand, and rotomolding should be a good partner,” said Guo Zichao, vice president of Anhui province's Agricultural Machinery Distribution Association. “Rotomolding is a mature technology, and we should make use of it.”

    Agricultural machinery like tractors, mowers and threshing machines requires relatively small orders and typically large, specialized parts, said Wang Kai, head of Terrui Mechanical Equipment Co. Ltd. Since its 2007 startup, his Shanghai firm has focused on the agricultural market.

    “For injection or blow molding, the initial cost [to set up a mold] is high,” he said. Rotomolding, on the other hand, is more flexible, he added. “I guess you could say it's niche molding.”

    Wang Zhanjie agreed. “I don't think the automotive market is a good market for rotomolding,” he said. “They need tens of thousands of products, and they need them all to be exact copies.”

    Agricultural machinery, he said, is a better fit, as is his own firm's specialty — plastic pipes. “These are large products and easy to make,” he said.

    Huang Jiuzhi, a sales manager at Shanghai Chunyang Roto-molding Co. Ltd., said the firm has not seen much domestic demand for agricultural machinery parts. In 2009, the company began exporting mower parts to Singapore; but, domestically, its largest demand comes from the military, to which it supplies large boxes and equipment for latrines, he said.

    Terrui founder Wang Kai spent five years researching the market before launching three years ago. While growth is slow, potential is huge; but, the biggest challenge has been educating farmers on technology's benefits. “If they realize they can upgrade their operation and that this can solve a lot of the problems they face, they will start to buy,” Wang said.

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