Chinese injection press maker Guangzhou Borch Machinery Co. Ltd. said it remains committed to the U.S. market, but it is delaying plans to invest $6 million in a new U.S. headquarters, amid uncertainty over potential U.S. tariffs on plastics equipment from China.
In February, Borch said it was building a new U.S. headquarters in Ontario, Calif., but in an interview at NPE2018, company executives said the Trump administration's proposed 25 percent tariffs on Chinese-made plastics equipment were a concern.
Chairman Zhu Kangjian and Hans Chen, president of the company's U.S. subsidiary, both made clear the company remains committed to the U.S. market and sees a lot of opportunities for its machinery, like its highly automated product systems and its development of cloud-based Industry 4.0 technology.
But as far as the investment in the new headquarters, they said they wanted to wait, at least temporarily, until the fog clears on the tariff and the trade situation between the U.S. and Chinese governments.
At NPE2018, the Guangzhou, China-based company was showing two molding machines: a two-platen model BU800 making polypropylene foldable crate parts and a BS260-III series model with servos.
The company is focusing on its ability to make automated production systems, with robots and peripherals, and use cloud-based technologies for data-sharing.
It believes those technologies, as well as a focus on larger machines, are helping it in the U.S. market. In February, Chen told Plastics News the company sold 100 machines in the U.S. last year and was looking for 50 percent growth in 2018 and expansion of its product line in the U.S.
Zhu said Borch is leading China's efforts to develop Industry 4.0 protocols for plastics machinery, and he's spoken on the topic at plastics industry events in China.
The company, which is one of China's largest injection molding companies, has been investing in technology upgrades at its Chinese factories to produce machines with 4.0 technology.
He said those efforts, including the country's Made in China 2025 program, are motivated by the Chinese manufacturing industry's realization that it cannot rely on low-cost labor and needs to upgrade.
Zhu is a past chairman of the China Plastics Machinery Industry Association and remains on the group's board of directors.
He declined to discuss specific options the company would consider to deal with tariffs, but he said he believed the two governments would ultimately negotiate a settlement and avoid a trade war.
In early April, the Trump administration threatened to impose tariffs on a broad range of Chinese goods, including 25 percent tariffs against many types of plastics machinery.
But Zhu said he believes the tariffs would ultimately hurt U.S. injection molding companies because the United States does not have a large domestic industry making injection molding machines.
As a result, putting tariffs on Chinese machinery will increase the prices the American plastics processing industry ultimately pays for its equipment, making the U.S. molding industry less competitive globally, he said.
