SHANGHAI — Milacron LLC is doubling the capacity of its China factory, both to expand its production of injection molding machines and begin manufacturing extrusion and blow molding equipment there.
The Cincinnati-based company disclosed details of the investment at the Chinaplas trade fair, held April 23-26 in Shanghai, and company executives said it was part of a move to expand production in both India and China to be more competitive in developing Asian markets.
“The first phase is to build new capacity for our all electrics,” said Milacron President and CEO Tom Goeke, in an interview at the show. “The second is to start utilizing the capacity as well to build some of the other designs that we manufacture in the U.S. and India and Europe, here.”
The investment of between $4 million and $5 million in its Milacron Plastics Machinery (Jiangyin) Co. Ltd. subsidiary in Jiangyin, Jiangsu province, will open in July, and aims to tap more heavily into growth in China, Milacron said.
“We're building machines in other parts of the world where for the local market here we're non-competitive,” Goeke said. “We'll be bringing technology from other regions and manufacturing to be cost effective in the local market.”
The expansion will more than double production capacity to about 950 injection molding machines a year, the company said in a statement.
Milacron has been building its all-electric Elektron series of injection presses there since 2009, and will begin adding production for hybrid injection presses, extruders and, in the longer-term, blow molding equipment, said Gerold Schley, managing director of the company's Ferromatik Milacron GmbH subsidiary in Malterdingen, Germany, and vice president of China operations for Milacron.
The company is also in the midst of a $10 million expansion of its Ferromatik Milacron India Pvt. Ltd. facility in Ahmedabad that is doubling capacity there.
The Jiangyin investment will expand the range of its Elektron machines there. It added a 30 metric ton press last year and, in the third quarter of this year, will be able to manufacture Elektrons with up to 650 tonnes clamping force.
Servo-driven versions of its hydraulic Maxima series are also being manufactured there now, the company said.
It will also begin exporting the Elektron series to the Americas from Jiangyin this year, after exporting them to Europe starting in 2010, said Toni Bernards, general manager of the Jiangyin subsidiary.
The growth of Jiangyin's business, though, is being primarily driven by the local Chinese market, which accounts for about 80 percent of sales, Schley said.
“The major focus for us is the Chinese customers, Chinese-owned companies,” he said. “The main focus for us and why we spent the major investment is the China market.”
Bernards said the growth of the all-electric machine market in China is a major reason for the expansion and the company wants to expand its very small market share there from a single-digit percentage to more than 10 percent.
Milacron said in the statement that it could enlarge capacity at the current site to 1,500 machines a year. It said it will deliver its first Jiangyin-built extrusion line in August.
The company also earlier this year bought out the small remaining stake of its local joint venture partner in Jiangyin, a company called Jiangnan Mould & Plastic Technology Co. Ltd., , and owns 100 percent of the factory, Schley said.