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May 22, 2018 02:00 AM

Cosmos eyes US market, rebranding

Kent Miller
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    Kent Miller
    Freeman Tang, CEO and Executive Director. Cosmos Machinery Ltd.

    Remember three years ago when Google Inc. reorganized under a new parent company, Alphabet Inc.?

    Something similar was afoot at the NPE2018 booth of longtime Hong Kong-based injection molding machine maker Welltec Machinery Ltd.

    Welltec's parent, Cosmos Machinery Ltd., is in the midst of a three-year rebranding exercise, said Cosmos CEO and Executive Director Freeman Tang. It's phasing out the Cosmos brand of injection molding machines and replacing it with Welltec, which it started in 1982.

    "A couple of years ago when I was acting [general manager] of Welltec, I was confused, our sales agents were confused, our customers were confused," Tang said. "Now for our injection molding machines, our branding is very clear: Welltec. The Chinese name is Dong Hua.

    "Hopefully, none of our customers or potential customers are confused now," Tang said.

    The parent company, Cosmos, was founded in 1958 to trade in Chinese-made machine tools.

    Speaking in a late April interview at Chinaplas in Shanghai, Tang liked the opportunities he saw at NPE2018.

    Eighty percent of the company's sales are to the mainland Chinese market, Tang said. While Southeast Asia is its leading export market, in Orlando, Fla., during NPE, the company was keen to catch up with customers from the Western Hemisphere and make some new ones.

    "We serve a lot of our South American market at NPE," Tang said.

    Staying in touch is crucial in these perilous times, Tang said.

    "Before Brazil basically collapsed, we were very strong in serving automotive customers [there]," he said. "We sold 30 big, two-platen machines. But since the economy is not doing well, all that came to a screeching halt."

    Sales have also taken a tumble in Venezuela, which Tang dubbed "a catastrophe." But up north, sales have been sturdy.

    "We've been selling to Canada, especially the automotive industry. The past two years, the growth has been substantial," Tang said.

    Cracking the U.S. market was a big motivation for the company to show in Orlando.

    "We started later than our competitors, and we didn't shift enough resources to the U.S. market," Tang acknowledged. "We will be starting almost from scratch in the U.S.

    "We need to do it step by step. We need to identify and work to the strength of new partners in the U.S.," he said.

    Tang said he's confident of the company's products.

    "On the quality front, we're definitely on track, and I like where we are. Our customers have a lot of confidence in our machines, especially our two-platen machines," Tang said.

    "For the past two years, the sales growth of our two-platen machines is very satisfactory," he added.

    But talk of a possible China-U.S. trade war has already cast a pall on mainland Chinese buying decisions, Tang said.

    "I can feel things are different from last year," he said.

    Like many plastics executives on both sides of the Pacific, Tang voices concern about the impact of tariffs on the industry.

    "We haven't been selling much volume in the USA. So, any direct impact on us is very limited. But you never know," he said. "It doesn't help us to grow the U.S. market.

    "I'm actually more concerned about my domestic customers who are in China whose products they export to the U.S.," the Canadian-educated executive said. "As of right now, from what we can see on the list, the products hit with tariffs are mainly parts or components, so it [won't] affect our customers that much. But I can already sense [a change in] the confidence of our customers in various industries."

    "I'm less optimistic about the second half of this year compared to last year," he said.

    For its own competitiveness, Cosmos is upgrading its factory near Shanghai, Tang said.

    "We're going to expand our production capacity in Wuxi for smaller-sized machines," Tang said. "Wuxi will be even more of a focus and growth spot for us."

    Cosmos's other factory, in Dongguan, near Hong Kong, will continue to focus on custom and industry-specific machines.

    At ChinaPlas, Tang touted the company's Industry 4.0 software, dubbed iSee, a cross-platform cloud-based system that links up with a user's manufacturing execution system.

    "We offer cloud service so customers have very limited upfront investment. They don't need a server anymore," Tang said.

    "Live data is transmitted back to us. With that data, we can help our customers with preventive maintenance," he said. "We can alert a customer when a part needs to be replaced."

    Launched in 2011, iSee has been implemented by major mainland manufacturers, including Haier Group Corp., Semk Electronics (Huizhou) Co. Ltd. and Sichuan Kelun Pharmaceutical Co. Ltd.

    "We are quite happy, quite sound on that front. We have a lot of expertise there," Tang said.

    Customers that a few years ago were taking a wait-and-see attitude toward Industry 4.0 are rapidly embracing it now, Tang said.

    "Everyone wants to increase their efficiency, decrease their down time and cut down on their labor costs," Tang said.

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