GUANGZHOU, CHINA — The injection molding machinery industry is overcrowded. “[The market] really only needs a few primary machinery makers,” according to Hong Kong businessman Richard Yan.
Yan is CEO and a director of Guangdong Yizumi Precision Machinery Co. Ltd. The 13-year-old company issued an initial public offering in January and became the first Chinese injection press maker listed on China's A-shares market.
A-shares are traded on the Shanghai and Shenzhen Stock Exchanges in Chinese currency by mainland investors, as opposed to H-shares, which are denominated in Hong Kong dollars and traded on the Hong Kong Stock Exchange.
A true industry veteran, Yan has fully immersed himself in the mainland market in the past three decades. A Hong Kong native, he joined Chen Hsong Group back in 1986 to manage the company's China business. He moved to Shunde, Guangdong province, in 1989 to lead Chen Hsong's subsidiary there. In 2001 he left Chen Hsong for another Hong Kong machinery maker, Cosmos Group. He started his tenure with Yizumi in 2008
Since then, the company has grown by leaps and bounds.
In addition to capacity and sales expansion, Yizumi acquired Marion, Ohio-based HPM's intellectual properties in 2011 and has brought the HPM brand back to the U.S. market with two series of machines, the smaller HST and the large tonnage HSII.
Yan is always on the lookout for the next wave of trends.
“I'm seeing the integration of peripheral equipment,” he said in an interview at the recent Chinaplas in Guangzhou.
Yizumi's core products have been injection presses, die casting machines and rubber processing equipment. But it's also adding in-house production of molds and automation systems, in a bid to become a supplier of integrated solutions.
“We are leveraging our strengths [in primary machinery] and expanding into full systems,” Yan said, “The focus is on specific applications for customers.”
In packaging, for example, Yizumi offers high-speed machines that come with multi-cavity molds. Yan said the company sold six of these systems on the first day of Chinaplas.
The company brought in mold-making capacity by establishing a joint venture with partner Chengdu Lianyu Precise Machinery Co. Ltd., which specializes in molds for medical packaging, medical devices, and food and beverage packaging.
“Our customers are mostly mid- and small-sized companies and we closely monitor their needs,” Yan said. While general-purpose machines still represent more than 70 percent of Yizumi's business, customized specialty machines are expected to generate growth, he added.
Automation adds another new piece to Yizumi's integrated system offerings. The company officially announced in a June 12 filing that it has set up a joint venture with an automation equipment firm in Suzhou to manufacture automation products.
Yan first spoke to Plastics News of the automation business at NPE in March and added more details at Chinaplas.
“Initially it will focus on peripherals and automation systems for die casting machines,” he said, “but we do see the market potential for injection molding machines.
“Adding robotics to our product portfolio will not only create new growth points, raise profit margin, but also enhance the company's overall branding,” he said.
In July, Yizumi will launch the second phase of its Wusha production base, boosting its capacity by another 30 percent. But Yan acknowledges the Chinese industry overall is seeking a rebalance of supply and demand after years of overinvestment.
In the meantime, the company continues to explore overseas market for sustained growth.
Since the launch of the two-platen HSII line at NPE, HPM has seen a rise of orders.
“We are pleased with the market response,” Yan said, “it looks like we will reach the goal of [selling] 50-plus machines in the U.S. this year.”
In fact, exports were the highlight in Yizumi's first quarter report, with a 55.4 percent jump that outshines the 1.5 percent gain in domestic sales. Overall quarterly sales increased by 6.4 percent to 262.7 million yuan ($42.4 million), net profit grew by 1.9 percent to 11.5 million yuan ($1.9 million).