SHANGHAI — Chinese injection press maker Tederic Machinery Co. Ltd. plans an initial public offering on the Shanghai stock market. The company also plans to invest 300 million Chinese yuan ($48.6 million) on R&D and capacity expansion in the next three years, the company's top executive said.
Tederic, based in Hangzhou, Zhejiang province, wants to triple its production capacity, add more research and development capability for two-platen and all-electric machines and expand its domestic and international sales and service operations, said CEO Terry Zheng.
The company is one of China's largest injection molding machine makers and currently produces about 3,000 molding machines a year, but it wants to use the IPO to boost its capacity to 10,000 machines annually by 2017 and open two new factories in Hangzhou, he said.
Zheng stressed that the timing of the stock sale depends on government approval but he said the company is targeting 2015. He declined to say how much money the company hopes to raise but said the firm could say more this summer.
He spoke at an April 26 interview at Chinaplas, held from April 23-26 in Shanghai, and in a follow-up emails and text messages.
Tederic is trying to capitalize in part on growth in China's building and construction markets, where Zheng said it has a strong position making molding equipment for pipe fittings.
The next five years in that market will be a critical time as China's builds out its infrastructure and its cities, he said.
The company plans to add five sales and service centers in China and build a network of 30 sales and service offices domestically, as well as improve its international sales and distribution operations and have representation in 37 countries, Zheng said.
Zheng said Tederic currently has annual sales of 700 million Chinese yuan ($113.4 million) but is targeting post-IPO sales of 2 billion yuan ($323.9 million) by 2017.
Besides construction, the company is looking for growth in the automotive, home appliance and packaging markets. It manufactures molding machines with clamping forces ranging from 45-6,000 metric tons, with a focus on machinery from 1,000-4,000 tonnes.
Some of the local industries it supplies have a strong need to upgrade equipment, Zheng argues.
“In China so many home appliance companies use very old machines, almost 15 or 20 years old,” he said. “Now they need new equipment for high quality production and for power savings.”
Tederic had a factory in the Philippines but it sold off that operation recently to make it easier to structure itself to have the IPO, Zheng said. It sold that operation to its Indian agent, SNT Trading Co., he said.
The company currently has 120,000 square meters of manufacturing space in Hangzhou.