GUANGZHOU, CHINA (July 5, 12 p.m. ET) — When 3-year-old Suzhou Hipro Polymers Co. Ltd. launched its castor-oil-based nylon products at Chinaplas 2010, it faced head-to-head competition with multinational giants as well as market entry uncertainty.
Now, a year later, Hipro is seeing rapid growth and is announcing aggressive expansion plans.
The company, whose primary investors consist of Jiangsu Feixiang Chemical Group and Boston-based Bain Capital, said its existing 5,000-metric-ton-per-year facility is running at full capacity, thanks to robust demand from China's booming auto sector and the global renewable energy market.
On June 16 the company broke ground on an addition that will triple its capacity, to 15,000 metric tons per year, by the second quarter of 2012, according to sales and marketing director Benjamin Pan.
The company's Hiprolon-branded long chain nylon products — including nylon 6/10, 10/10, and 10/12 — contain 40-100 percent castor-oil-based content, he said. Main applications include automotive tubing systems, backsheet for photovoltaic solar modules, electronics components, as well as slewing ring parts for wind turbines.
“We have made contribution to and also benefited from the tremendous growth of China's auto industry,” Pan said. He expects the auto business to continue to expand steadily in the near-to-mid term.
Today Hipro's solar business is mostly tied to exports to Europe. Meanwhile, China's solar industry also is thriving, he added. Both solar and wind power sectors are gaining popularity, due to public concern over the safety of nuclear power, he said.
Pan said the company enjoys a vertically integrated production chain, from monomer to compounds. Parent company Feixiang Chemical is China's largest producer of sebacic acid, a derivative from castor oil and a feedstock for nylon. China, India and Brazil are the world's major castor oil producers.
The global castor oil market saw a 60 percent price hike in the past 12 months, due to unfavorable weather as well as soaring demand, he said.
“We had to pass along the feedstock price fluctuation,” Pan said. However, price competitiveness remains critical for the development and growth of bio-based polymers, he added.