U.S. company Extrusion Dies Industries LLC is opening a much larger facility in China this year, as part of a longer-term investment to develop stronger capabilities for Asia-focused product development and manufacturing.
EDI, based in Chippewa Falls, Wis., will spend at least $5 million during the next five years on the China plant, sales director Robert Deitrick said at the Plastindia trade show, held Feb. 1-6 in New Delhi.
The company will be moving this year from an 18,300-square-foot factory to a 48,400-square-foot facility in Shanghai, Deitrick said.
The company also is adding its first direct EDI employees in India, two service technicians, as it sees that market starting to grow, Deitrick said.
But more importantly for now, the company intends to shift the China facility's focus away from support work and more to developing products for growing local markets in Asia, including India.
“We are going to move it towards being a manufacturing center for the local market,” Deitrick said. “We will look to produce new equipment for the local market in China. Right now it is mostly a rework center.”
The changes will be phased-in gradually over the next five years. EDI's Wisconsin plant will focus on higher-value-added products and handle the vast majority of the rest of EDI's global markets, he said.
The company had looked at adding manufacturing in India, but it ultimately decided on expanding in China because EDI's India sales right now are only about 30 percent of its China sales, Deitrick said.
For a company of its size — exceeding $60 million in annual sales — it did not make sense to have manufacturing in both India and China, he said.
However, the market in India holds interesting opportunities for EDI, which specializes in dies and other equipment for flat plastics applications such as sheet, film, extrusion coating and fluid coating.
India uses more pouches and films for flexible packaging of food and medical products, and that will create a number of potential opportunities as the country's consumer market grows, Deitrick said.
“The Indian market is one of the best emerging markets — it's second only to China,” Deitrick said. “China is growing faster. However, the opportunity in India with its emerging middle class will be huge.”
Right now, Indian polymer consumption per person is very low, about 13 pounds annually, compared with a worldwide per-capita average of 59 pounds, and 79 pounds in China, according to figures presented at a conference held at Plastindia.
But EDI noted that it has a strong customer base in India.
For example, the company already manufactures a majority of dies for one of India's largest makers of raffia, Lohia Starlinger Ltd. in Kanpur, according to Deitrick. As that market moves from monolayer extrusion to more sophisticated coextrusion, it will mean opportunities for the company, he said.