Hola, China!

Spain''s plastics processing industry has become a key entry point for Chinese-made molding machinery into Western Europe.

Spain long has been a country whose plastics processing industry, maybe more than others, has worked a careful balance between using advanced technology and keeping capital costs low. Until recently the balance still tipped towards technology, says Margarita Hu, sales manager at Sound Europe (Sant Fost de Campsentelles, Spain), the European headquarters for Chinese injection molding machinery manufacturer Sound.

"Just two years ago, when I approached customers, we would be turned away. No one wanted to buy Chinese machines. Now, they come to us," Hu said during November''s Equiplast trade show, held trienially in Barcelona. She attributed the transition to a changing mindset at Spain''s processors as well as one at Chinese machine manufacturers.

Spanish processors, accustomed to purchasing top-line but more costly machinery from German, Austrian, or Italian machine makers, have given up much of their profit margin and have been forced to be more cognizant of capital costs. Also, she said, Chinese machine manufacturers have become much more open to suggestions on machine improvement, taking cues from customers as well as, at her firm, its Spanish-based engineering staff.

The Spanish market is not massive; estimates varied from industry insiders at Equiplast but place it as an 800 to 1200 injection molding machine market/yr market, with 2005 sales on the low end of spectrum. Reto Morger, marketing manager at molding machine maker Netstal (Naefels, Switzerland), says his firm''s estimates place the Spanish molding machine market as high as 1200 units/yr, of which a solid 200-300 now come from Chinese or Taiwanese manufacturers, a significant jump in less than three years.

During Equiplast many machine makers feared the market would slide further as carmaker Seat (part of VW) announced it would release 10% of its workforce due to sagging sales.

But Spain''s Western European ties, juxtaposed against its historical position as one of a handful of lower-cost European countries, may well make it a test case for how molding machine sales will develop in other Western markets. At Equiplast there were at least as many molding machines on show from Asian manufacturers as there were European models.

Naturally, Europe''s machine makers are vigorously defending market share on the Iberian Peninsula. At Arburg (Lossburg, Germany), Marketing Director Christoph Schumacher questions, perhaps quite astutely, if Western European processors who base molding machine purchasing decisions solely on price have much of a future. His firm will hit its sales goal for the region in 2005, though he notes that pricing pressure there is stiffening as more Asian-based machine makers move in. The same is happening in Italy, Arburg''s second largest market after its domestic one. Asian molding machine manufacturers also actively target Turkish processors'' business.

There are two molding machine makers based in Spain, Mateu & Sole and JB Fiser. Francesca Fisas Fontané, commercial director at the latter, described the Spanish market for injection molding units as poor, with margins on machine sales low due to the Asian impulse.

Message: more than just low pricesAmong Chinese and Taiwanese machine makers there is stratification developing between those firms competing on cost and those who say they have a better mix of low cost and technology. Falling into the latter group is Asian Plastics Machinery (APM), says Agnus Durán, commercial director at Just in Time Plastics (JTP; Barcelona), the Spanish distributor of APM machinery. His other firm, Centrotécnica, distributes machinery for a number of leading Western European machine makers including injection molding machinery from Dr. Boy and from Italtech. "We formed JTP to avoid confusing customers (between our Chinese and European brands)," he said during Equiplast.

Durán explained that APM units would not be part of the extreme low-cost pricing wars. "We don''t want to enter into the cheap machine price war. We sell the APM machines to multinationals, bigger firms," he said and added, "We are fighting with European brands." He said APM machine quality is proving itself in the number of repeat customers his firm has seen.

One Spanish firm, Protecnos (Madrid), formed in the 1990s with its machine manufacturing all done at joint ventures in China. The firm sells a broad range of auxiliary equipment as well as injection molding machinery, and plans soon to add profile extrusion machinery to its mix, according to Alberto Villatoro, commercial director. Still, in five years of molding machine sales, the firm has placed just a dozen machines, testament to Western European processors'' hesitation to purchase some Chinese machinery.

Hu at Sound Europe said her firm is improving its technology but seeks to maintain its low-cost position. A 130-tonne machine running at Equiplast could be had for ?30,800, she said-adding the price is on the high side because of some options.

Extruder makers not yet affectedLower-cost Asian blown-film extrusion lines have yet to make any serious inroads into European processors'' facilities, said officials at leading Italian blown-film extruder manufacturer Macchi (Venegona). Macchi also exhibited during Equiplast, with its near-30m-tall tower (the new line features gearless synchronous drives) a stark contrast to the 3m-high one across the aisle in a Taiwanese manufacturer''s booth. "This is the father, that is the son," is how Macchi''s Mariangela Signorini, sales and marketing director, described the contrasting machine technology.

Matthew Defosse [email protected]