HONG KONG (July 23, 1:10 p.m. ET) — Hong Kong-based compounder Plastic World (China) Ltd. and Germany's Styrolution Group GmbH are expanding in China with a licensing agreement to manufacture several grades of Styrolution materials at one of PW's South China facilities.
PW is also making an unrelated investment in a new factory in East China's Jiangsu province, to expand its geographic reach.
The two companies said July 23 that PW's factory in Shenzhen will begin making Styrolution acrylonitrile styrene acrylate, acrylonitrile butadiene styrene and a grade of high-heat acrylonitrile butadiene styrene for the Chinese market, including for the auto industry.
PW will have capacity to manufacture 9.9 million pounds per year of the three materials in Shenzhen.
Since 2002, PW has compounded other materials for Frankfurt, Germany-based Styrolution, including styrenic polymers, ABS and high-impact polystyrene (HIPS), all for the Chinese market.
“This agreement allows us to deepen our relationship with PW and is a positive step forward for us as we look to further strengthen our global market leadership, expand our product offerings and be closer to our customers in China,” said Hyung Tae Chang, Styrolution president of Asia-Pacific.
The new licensing agreement is part a pattern of recent activity in Asia for Styrolution, which is a joint venture of the styrenic businesses of BASF and Ineos Group.
In March announced it was opening a new ASA line in Ulsan, South Korea with a capacity of 90 million pounds and expanding production by 70 million pounds in Vadodara, India, for ABS and styrene acrylonitrile resins-related compounds.
At the same time, the company said it was modernizing one German facility and ending an off-take agreement for styrene and PS from an INEOS factory in Marl, Germany. INEOS at the time said the plant's PS and styrene units would be shut down by year's end and the 110 workers offered alternative roles
A PW executive said the Hong Kong company is increasingly focusing its investments on China's internal market, and said that the expanded pact with Styrolution is aimed partly at China's growing automotive market. One target is to build business with the sizable Japanese auto production base in Guangdong province, PW said.
“What we are considering now is how to develop inside China for the China market,” said Barry Chan, PW director, in a July 23 telephone interview. “If the target is exporting, it is not growing.”
PW also purchased its new factory in Suzhou, Jiangsu province, in March and expects to have it operating next year, Chan said.
It will be the company's first manufacturing outside its base in Guangdong province, Chan said. The Suzhou factory, its third overall, will start with production of about 13.2 million pounds a year.
The company has about 165 million pounds of capacity at factories in Shenzhen and Zhongshan, Guangdong province. The privately held firm has annual sales of about HK$800 million (US$103 million) and employs more than 200 people, Chan said.