Shanghai — Materials maker A. Schulman Inc. is opening a new plant in Changshu, China, a $5 million investment for producing color concentrates that the company says will eventually include compounding for masterbatch and engineering plastics in the next four years.
The Fairlawn, Ohio-based firm said that while the initial investment is small, the total investment in the factory, which opens officially April 28, could reach $30 million.
Derek Bristow, the company's senior vice president and general manager for Asia Pacific, said the Changshu factory, near Shanghai, is designed to expand Schulman's geographic reach in China.
It currently has a facility in Dongguan, Guangdong Province, in southern China, where it has been investing in additional capacity for masterbatch and engineering plastics production.
“We wanted to expand to the other side of China for a long time,” said Bristow, in an interview at the company's booth at the Chinaplas 2016 fair, held April 25 to April 28 in Shanghai.
The Changshu facility will open with 6.6 million pounds of annual concentrates capacity with three production lines and is expected to grow to 15.4 million pounds in four years, said Roger Zhao, managing director of A. Schulman's Dongguan facility.
The Changshu plant is expected to add 22 million pounds of masterbatch capacity in 2017 and 22 million pounds of engineering plastics compounding capacity in 2018, Zhao said.
Schulman is also planning to beef up its research and development efforts in Asia, Bristow said, but some of the details have yet to be worked out.
“We see Asia becoming a global technology driver” Bristow said. “We're seeing some of the biggest converting machines coming into China, far in advance of anything else globally.”
The size of some of the consumer markets in China are, for example, driving much larger investments in factories making breathable films for products like diapers, and that's requiring upgrades to some of its masterbatch materials for higher volume processing, he said.
“The machines going into China need to run bigger and faster,” he said. “We can't cut and paste what we're doing elsewhere.”
“In Europe they say ‘We've got products that can run as fast as you like, up to 200 meters a minute, while our customers in China need 400 meters a minute,” Bristow said.
The company named its first research and development director for masterbatch in Asia in 2015.
But Bristow said the company has no plans at the moment to create a single R&D center in Asia, preferring to focus on creating application development centers at various factories.
“We know we're going to invest heavily in R&D,” he said. “In this next budgeting process we'll be able to figure out how much we can invest.”
“We're quite confident it will be significant but it's a little early to say what the detail will be,” he said.
The company also used the Chinaplas trade fair to release its 3rd “BeColor” forecast for color trends in the specialty materials markets.
Working with a design firm and looking at things like fashion trends globally, the report identifies color developments in various industries and markets.
“We tried to make this very user friendly,” said Patricia Mishic, Schulman's executive vice president and chief marketing officer. “We have our markets, we have the regions and then we say where would the color be more appropriate, where would that trend sell very well.”