China's thirst for cleaner water is creating opportunities for some plastics firms, as it pushes others to adopt cleaner production practices.
Addressing water scarcity is a top priority of the government. Analysts at the Hong Kong-based China Water Risk project said the topic got “heavy mention” in the country's 12th Five Year plan.
All the attention has plastic pipe manufacturers, makers of filtration systems and others expecting more demand, even as they face more pressure to clean up their processing, judging from interviews at Water China 2012, held Feb. 23-25 in Guangzhou.
“It is a big opportunity,” said Scott Wu, general manager for Glynwed Pipe Systems (Shanghai) Co. Ltd.
Foreign producers have some advantages, he believes: “Today in China and Asia there are lots of local players; their weakness is technology and systems.”
Glynwed, which has a joint venture pipe factory with more than 40 production lines in Zhongshan, sees cities using more plastic pipes in water systems, even as steel remains preferred for cost reasons, he said.
Environmental groups highlight water challenges. The China Water Risk project, which is funded and managed by the environmental philanthropy wing of Hong Kong investment advisory firm ADM Capital, estimates the world will face a 40 percent shortfall in water supply by 2030.
China is also becoming more quality-oriented, with pipe buyers starting to put quality first and price second, said Xie Tian Hui, general manager of Shanghai Carrier Special Valve Co. Ltd. Another executive at the show, however, said the market in China remains very price-sensitive.
“This market, yes, it is huge, but ... the cheapest will win the bid,” said Jane Shen, China national sales manager for Compton, Calif.-based IPS Corp., which makes additives for the plastic pipe industry.
One U.S. firm said its China business has been growing.
Fairburn, Ga.-based plastic filtration equipment maker Porex Corp. said its China business now accounts for 30 percent of global sales in filtration products.