Plastics processor Promens hf is speeding up its expansion into China and launching a broader push into Asia that will see it set up several factories there in the next few years, the company's top executive in the region said.
The Kópavogur, Iceland-based company dedicated its first China factory on Nov. 30 and will be doubling its manufacturing space there next year, two years ahead of its initial plans, to meet growing demand, said Promens Asia Managing Director Bjarki Gardarsson.
The previously undisclosed Asian expansion is part of a broad push Promens is making in emerging economies including China, India, Russia, South America and Turkey, as it wants to broaden beyond its mainly European manufacturing platform now, Gardarsson said in a Dec. 10 telephone interview with Plastics News.
The company has 43 factories worldwide, but only two in Asia, at the newly opened facility in Taicang, Jiangsu province, and in Ahmedabad, India.
It plans to set up at least three more factories in China, and two elsewhere in Asia, in the next several years, he said.
“We are really expecting to see a strong footprint of Promens in Asia,” Gardarsson said. “I would expect to see us in several locations in China and Asia in coming years.”
Promens employs 3,800 and said it is the world's largest rotational molder, as well as using other manufacturing processes like injection molding and blow molding.
It said it expects sales this year of 600 million euros ($826.0 million), and last month announced plans for an initial public offering to fund further growth, including in South America and Asia.
Setting up the facility in China has opened doors, Gardarsson said, because its global customer base in industries like automotive and packaging is increasingly looking for suppliers worldwide.
“Now that we have a facility [in China] and can look customers in the eye and promise delivery times and production, we are seeing strong interest from our customers,” he said.
Promens first announced the China facility in April, and at the time planned to double it within three years. But it will double the Taicang factory's manufacturing footprint to 5,000 square meters within one year, or two years faster than its initial plans, Gardarsson said.
He said the company plans to invest another 6 million to 10 million euros in Taicang in those two years. It could add about one rotomolding machine a year for the next half-decade, and will likely add 10 molding machines and 60 employees in Taicang in the next three years, he said.
Taicang opened last month as a 3 million euro investment with 20 employees. It will initially manufacture insulated tubs for the food industry, but will expand into automotive, medical and personal care sectors.
It plans to add automotive business there in early 2014 and add capabilities for injection and blow molding by the end of next year, he said.
“The new Promens production facility in Taicang represents a very large step in our strategy to leverage our strong customer relationships in rapidly growing economies, where plastics will play an important role in optimizing supply chains, increase food safety and meet the needs of a growing middle class,” said CEO Jakob Sigurdsson, in a statement.