Investment expansion in China's plastic machinery industry continues to grow
Investment expansion in China's plastic machinery industry continues to grow
Shanghai - China's plastic machinery industry grew 12 per cent in 2013 and is expected to grow to about 5 per cent this year. But according to a recent feedback from Chinaplas, a Chinese international rubber show in Shanghai, it does not have an impact on the global model companies' investment plans in China.
Multinational companies and Chinese companies announced the expansion plans at the exhibition on April 23 and 26, hoping to seize the long-term opportunities of the Chinese market. China is the world's largest producer of plastic machinery.
For example, the American company merkelon has announced that it will spend $4 million to double the size of jiangyin's factory. The company will be able to add fully electric molding machines and will produce more cost-effective machines for Asian customers.
The world's largest producer of injection molding machine, Austria engel holdings co., LTD., announced that it would build a new factory in changzhou, designed for Asian customers to develop new brand middle-grade standard molding machine, based on high-end machines in the market to further expand the reach.
Other industry heavyweights, including sumitomo plastics machinery co., LTD., and Japan fine resin industries co., also said at the show that they would expand in China.
Chinese companies are also investing. The injection molding machine maker teri machinery Co. said it will spend $50 million next year to expand and issue an IPO.
For foreign companies, there are two big investments: China is becoming a mechanical export platform, but perhaps more importantly, foreign companies are taking a closer look at local demand.
"China is the focus of our business and the reason for our massive investment," said Gerold Schley, vice President of China operations at milakron and German Ferromatik Milacron GmbH.
China's injection molding machine manufacturing giant Haitian international holdings co., LTD of China plastics machinery industry association statistics show that in 2013 Chinese plastic machinery manufacturers of domestic sales climbed 12%, from 36.9 billion yuan in 2012 yuan to 41.6 billion yuan last year.
But growth may slow in 2014. Zhu kangjian, President of the China plastics machinery industry association and President of guangzhou botron machinery co., said he expects growth of about 5 percent this year due to the poor macroeconomic situation.
With the credit crunch, smaller companies are under more financial pressure, he said. The widely watched HSBC China manufacturing index fell at its slowest pace since late 2011 in March, with only a slight improvement in April.
Publicly listed Haitian international also sees a big challenge in 2014.
I might be more optimistic about the market in 2013 than it is in 2014, "HelmarFranz, the chief strategy officer, told plastic news in late march. "I still think China is undergoing major social and political changes."
Haitian, China's largest maker of injection molding machines, reported a 19 percent rise in domestic sales in 2013. Haitian is also implementing the expansion of two new factories in ningbo.
The outlook is mixed. On the positive side, overall, China's plastics industry is growing faster than the overall economy.
Haitian quoted molding machine association statistically, plastics processing enterprises in China in 2013 sales climbed 14% to 1.86 trillion yuan, the profit rose 16% to 112.3 billion yuan, sales climbed 8% to 61.9 million tonnes.
Some multinationals expect plastic demand in the local market to continue rising.
European chemicals maker basf group in China international exhibition on the rubber and plastic, says 2020, basf is expected annual growth rate will reach 11% of the sales in greater China, from 5.5 billion euros last year to 12 billion euros.
Greater China (including China, Hong Kong and Taiwan) is the third largest market in basf after Germany and the United States.
Teri says its planned expansion and IPO has been driven by growing demand for plastic pipes and accessories in the construction industry, as well as strong demand in the automotive and packaging industries.
Industry statistics show that China's plastic pipe industry grew 10 per cent in 2013, thanks to a building boom in China to relocate nearly 80 million new urban residents by 2020.
Terry Zheng, Terry's chief executive, said: "it is well known that the Chinese government is vigorously building pipeline infrastructure, drinking water facilities and buildings. I think we have five years to seize this market."
