Plastic pipe maker Georg Fischer Piping Systems Ltd. has opened a plant in Beijing to tap what it said is demand for higher-quality building components, as the firm saw sales growth there of 45 percent in the first half of the year.
The Schaffhausen, Switzerland, firm said the 58 million yuan ($8.7 million) Beijing factory has the capacity to make 66 million feet of pipe annually. China is now its largest market, the firm said.
The investment came as the firm announced a partnership in September with Midland, Mich.-based Dow Chemical Co. to promote a new Chinese national standard for polyethylene raised-temperature-resistance pipe for hot- and cold-water applications.
That new standard will create opportunities because it will “carve out a high-performance segment” in China's existing pipe market and increase regulatory standards, according to the company. The two firms plan a series of technical seminars across China targeting designers, testing bodies and others.
As China has sought to upgrade its water and gas piping systems, and consumers pushed for more reliable systems, China accounted for 14 percent of GF Piping Systems total sales in 2009, and that is likely to be “significantly more” in 2010, Pietro Lori, president of GF Piping, said in a statement.
The pipe unit had 2009 sales of 1.06 billion Swiss francs ($1.09 billion), down 13 percent from 2008, as the firm implemented restructuring and cost-cutting programs. First-half 2010 sales in the unit were SFr584 million ($603 million).
Lori said he expects the 180,000-square-foot Beijing factory to be at high capacity utilization rates within two years.
It will open with two extrusion lines, with plans to add lines to boost capacity to 263 million feet of pipe annually, likely within one year of finishing the initial phase of investment, the company said. That initial phase is expected to be complete in August 2011.
The factory employs 60 now, with plans to add another 100 by the end of the initial phase.
The Beijing factory will make building technology systems for hot- and cold-water installations, along with heating and geothermal systems. It also will make fittings, valves, instrumentation and control technology, and will have an on-site training facility.
The plant gives GF Piping Systems 12 factories in Asia, doubling its footprint there in the last five years. It opened a manufacturing operation in India last year, and one in Malaysia in 2008.