Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Videos
    • Podcasts
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Notable Leaders in Sustainability
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics Caps + Closures: A Global Online Event
    • Women Breaking the Mold Networking Forum
    • Bioplastics Live
    • Numbers that Matter Live
    • PFAS Live
    • Plastics in Politics Live
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Resin Prices Overview
    • Commodity Thermoplastics
    • High Temperature Thermoplastics
    • Engineering Thermoplastics
    • Recycled Plastics
    • Thermosets
    • Europe - Virgin
    • Europe - Recycled
    • Europe - Feedstock
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
April 07, 2014 02:00 AM

Two Chinese plastic pipe makers eye IPOs, as industry expects consolidation

Steve Toloken
Assistant Managing Editor
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Steve Toloken
    Puretown Chairman Zhou Tingchang

    KUNMING, CHINA — Two plastic pipe makers in China are planning initial public offerings to fund nationwide expansions, hoping to tap into growing demand from urbanization and better position themselves for an expected consolidation in the country's pipe sector.

    Both Puretown Environmental Technology Co. Ltd. in Kunming, Yunnan province, and Dongxin Plastic Co. Ltd. in Liaocheng, Shandong province, said at a recent industry conference that they are planning stock listings to raise up to 500 million Chinese yuan ($80.9 million) each.

    Puretown's plans appear more advanced, with the company looking to apply for its 500 million yuan IPO later this year in the Shenzhen stock market and go public next year, its top executive said in an April 3 interview at the China Plastics Piping Association annual conference in Kunming.

    The company, which currently has two factories in Kunming and one in Jiangsu province, would use the money to set up a nationwide network, building four new factories in Shandong province and the cities of Shenyang, Xi'an and Guangzhou by 2017, said Puretown Chairman Zhou Tingchang.

    A Dongxin executive, meanwhile, said in an interview on the sidelines of the CPPA conference that his company plans an IPO in the Shenzhen market by 2016 that would raise between 300 million yuan ($48.6 million) and 500 million yuan.

    General Manager Wang Quanlong said Dongxin has not decided where it would build its new factories, saying it depends partly on which local governments agree to buy its pipes and related equipment, like plastic inspection well chambers.

    Both companies pointed to continued strong increases in demand for infrastructure spending, the expansion of rural drinking water systems and housing demand from urbanization.

    China's government projects that 80 million Chinese, roughly the population of Germany, will move from the countryside to cities by 2020.

    “The next year 10 years is the greatest chance for municipal pipeline construction,” Zhou said.

    While the Chinese plastic pipe industry has significant overcapacity, Zhou said his company sees opportunities to expand as the inspection well chambers it manufactures for pipelines switch from brick to plastic.

    About 95 percent of the pipeline inspection well chambers in China are brick, but mirroring international trends, China's pipeline system will begin switching to plastic chambers, Zhou said.

    The plastic versions are lighter, saving transportation costs, and have a lower environmental footprint to manufacture than brick, Puretown claims.

    Puretown, which was established in 2003, said it has seen its sales grow from 70 million yuan ($11.33 million) in 2010 to 400 million yuan ($64.8 million) last year. The company has 360 employees, including 125 with college degrees, and has research partnerships with several universities, Zhou said.

    It opened a 130 million yuan ($21.1 million) factory in Wuxi, Jiangsu province, in November, with six extrusion lines and four injection molding machines, its first factory outside its headquarters in Kunming.

    Each of the planned four new additional factories would be an investment of about 150 million yuan ($24.3 million), Zhou said. He spoke during a tour of his factory, held in conjunction with the CPPA conference.

    Beyond the planned IPO, Zhou said the company has also received 140 million yuan ($22.7 million) in venture capital funding from four separate companies.

    Both companies said they wanted to get ahead of a wave of increasing consolidation in China's plastic pipe industry.

    CPPA said in a review of the industry at its conference that larger companies in the industry are developing more quickly and smaller firms are facing more troubles.

    Beijing-based CPPA noted there were some bankruptcies last year, even as overall plastic pipe production rose 10 percent, to 12.1 million metric tons. China's largest plastic pipe maker, Lesso Group Holdings Co. Ltd., said last year it expected more consolidation.

    Wang said he believed the next three years would see major consolidation, as smaller and medium-size enterprises experience more trouble getting access to capital, and with the improved transportation networks in China helping larger companies.

    “In this transition period, many SMEs face problems of finance, of rising labor costs, and having the best technology,” he said.

    He said Dongxin emphasizes research and development, and is currently developing a 1.6 meter diameter PVC drainage pipe that it believes will be the largest diameter pipe of that kind in the world. It will be built on machines that the company has patented, Wang said.

    RECOMMENDED FOR YOU
    Documentary looks at how ‘we love to hate' packaging
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    An 8,000-ton dream for Milacron, 20/20 Custom Molded Plastics
    2
    US Merchants opens curtain on growing injection molding operations
    3
    Report: Tekni-Plex may be for sale
    4
    Plastics processors face automation needs, sustainability demands
    5
    Rising costs prompt delay in Corpus Christi PET plant construction
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Find more newsletters at plasticsnews.com/newsletters.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Notable Leaders in Sustainability
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Videos
      • Podcasts
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics Caps + Closures: A Global Online Event
        • Women Breaking the Mold Networking Forum
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
      • Editorial Livestreams
        • Bioplastics Live
        • Numbers that Matter Live
        • PFAS Live
        • Plastics in Politics Live
        • PN Live: Mergers and Acquisitions
        • Polymer Points Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Resin Prices Overview
      • Commodity Thermoplastics
      • High Temperature Thermoplastics
      • Engineering Thermoplastics
      • Recycled Plastics
      • Thermosets
      • Europe - Virgin
      • Europe - Recycled
      • Europe - Feedstock
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified