SHANGHAI (May 4, 3:15 p.m. ET) — Oechsler Plastic Products (Taicang) Co. Ltd., a wholly owned subsidiary by Ansbach, Germany-based precision molder Oechsler AG, reported a whopping 160 percent growth of sales and a major facility expansion.
Oechsler Taichang, which has become its parent company's largest production base worldwide, expects China's domestic market to outgrow exports and take a higher share in its business.
The company, located in Taicang, China, about an hour from Shanghai, reached 700 million yuan ($111 million) in sales in 2011, compared to 270 million yuan ($43 million) in 2010. The domestic market and exports each represent about half of the total sales, managing director Vincent Chan told Plastics News in an interview at the company's Chinaplas booth.
He expects the share of domestic sales to grow in the next two years, as Chinese consumers show stronger buying power.
“The trend is clear — our customers are increasingly choosing China for their global new product launches.” He was speaking of OEMs of automotive and electronics, two major end markets for Oechsler.
Oechsler established its China subsidiary in 2004 and started operating in 2005 with about 50 employees in rented manufacturing space. It now has a workforce of more than 1,000 and just launched a new 193,000-square-foot plant at the end of last year.
Chan said the company has reserved about 6 acres of land for further greenfield expansion and is planning a second phase of the new plant. Construction may start within a year or two.
Despite the wage hikes in China, Chan said labor cost remains in a reasonable range since it's only a small faction of the production cost for precision parts. The company is increasing the use of automation equipment at the same time.
Chan added that Oechsler also strives to strengthen its social responsibility and provide positive impact to the community. The new factory is scheduled to obtain the ISO14000 environmental management and OHSAS 18000 occupational health and safety certificates this year.
At Chinaplas, held April 18-21 in Shanghai, Oechsler touted two technologies that help the plastics molder stay ahead of the trends. According to Chan, glass-fiber-reinforced composites, which have been mostly used to make mechanical components, are gaining popularity in cosmetic applications in electronics. Oechsler started mass production at the end of 2011 and claims to be the first company to have fully applied the technology, he said. Oechsler's booth displayed a variety of different applications: automotive, electronics (such as the back cover for Blackberry smartphones) and sports footware (such as ski shoes).
“It's stronger than traditional plastics, hard but not brittle, can make cell phone casing that's as thin as 0.2 mm, and also creates an very attractive appearance,” Chan said.
The other technology the company highlighted is ceramic/powder injection molding for electronics and automotive applications. The company supplied power molded push buttons for dash board to BMW in Germany and is starting to work with BMW's China operation.
“We are considering expanding the capacity in China following a market study,” Chan said. The company has the know-how to handle the high shrinkage (more than 30 percent) and compensate for the brittle nature of the highly heat-resistant and abrasion-resistant material. It's working with customers to develop more applications and is conducting initial testing.
In addition to the Taicang operation, Oechsler also owns two German facilities in Weißenburg and Küps, as well as a subsidiary in Lipova, Romania.