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June 22, 2015 02:00 AM

China's warming market for hot runners

Kent Miller
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    Kent Miller
    Brian Ruan of Shanghai Sure Hot Runner && Electric Co. Ltd., said more molders are interested in hot runners for their ability to reduce labor requirements.

    GUANZHOU, CHINA — The Chinese hot runner market is booming, and companies promoted the increasingly popular technology at this year's Chinaplas trade show.

    Ruling the domestic roost are the Chinese subsidiaries of South Korea's Yudo Group, which is said to the world's biggest manufacturer of hot-runner systems with $560 million in global annual sales.

    Yudo has set up six manufacturing subsidiaries across China, in Dongguan, Suzhou, Qingdao, and Ningbo, to reduce shipping costs, tap into qualified labor and to be near its primary customers — mold makers.

    “Guangdong has about 6,000 mold makers,” said Roy Wong, overseas operation manager for Guangdong Yudo Hot Runner Systems Co. Ltd.

    On the show's opening day, Cincinnati-based Milacron LLC, the world's second-largest hot runner manufacturer, announced it is investing $10 million to beef up its factory near Shanghai to capitalize on China's growing appetite for the technology.

    Hot runner systems save resin and production time and result in a more attractive, higher-quality product. “You can save 25 percent of the plastic material,” Wong said. “Also, it saves time. The cooling time is faster.”

    Hot runners are in demand across many industries, including automotive, household appliance, medical, and packaging, Wong said.

    But good old cash savings may hold the biggest appeal. Brian Ruan, sales manager at Shanghai Sure Hot Runner & Electric Co. Ltd., points out hot runners require less labor than their old-fashioned cold runners — a key consideration, with mainland labor costs here in the Pearl River Delta rising about 10 percent a year.

    In this sense, hot runners are part of an industry-wide automation push by processors who are looking over their shoulders at increasing competition at home and abroad.

    Despite the strong sales, China is still playing catch-up with the rest of the world. David Zheng, regional sales manager for Suzhou HTS Moulding Co. Ltd. said that seven or eight years ago, hot runners had a scant 10 percent market penetration in China, compared to 60 percent or more in more developed economies.

    “Hot runners are part of the upgrading and expansion of the Chinese plastics industry,” Zheng said through an interpreter.

    Suzhou HTS has annual sales of 200 million yuan (about $36 million), of which 30 percent are exports. It has 350 employees, including 28 R&D staff. Customers include Taiwan's Foxconn Technology Group.

    Yudo Group was founded in 1980, but most of the manufacturers showing at Chinaplas are mere striplings. Shanghai Sure Hot Runner & Electric Co. Ltd. started off making controllers before starting to make its own hot runners in 2008, said Ruan, while Suzhou HTS Moulding is 15 years old.

    Hot runner systems also generate higher-quality yields for plastics mixed with additives such as glass or talc, explained David St. Aubin, general manager at PETS Hot Runner (Shenzhen) Co. Ltd. “[Hot runner systems] accelerate the crystallization process.”

    Bong Guen Cho, sales manager of Sino Mold Component Co. Ltd. (a subsidiary of Yudo), offered another lure for providers: the profit margins. “Hot runner makes money,” he said flatly.

    Sino Mold makes hot runner systems and components at a 270-worker factory, which includes 35 R&D staff, in Dongguan.

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