China, known as the world''s workshop, has been welcoming another production sector to its shores of late: plastics processing machinery manufacturing. With export-oriented industries such as electronics continuing to make rapid gains, a fast-growing auto industry, and increasingly affluent Chinese consumers demanding higher quality for packaging and other products, demand for more advanced machinery is expanding. And numerous Western machine manufacturers see a local production presence as one key in growing their share of this pie on account of superior economics and faster delivery times.
We first reported on this trend last month (January 2004, MP/MPI). The Chinese market for injection molding machines is pegged at between 25,000 and 31,000 units by industry observers, with an estimated 16,000 to 20,000 entry-level machines supplied by local Chinese manufacturers; 6,000 to 7,000 mid-level units by firms from Hong Kong and Taiwan; and 3,000 to 4,000 high-end presses by Western players, including the Japanese.
Stephan Greif, VP for China at Demag Ergotech (Schwaig, Germany), believes many processors currently at the low end of the scale will eventually shift to more sophisticated machinery, and the mid-level market segment could thus increase by up to 10,000 units. Demag Haitian Plastics Machinery (Ningbo), Demag''s joint venture with Chinese giant Haitian, targets this sector.
Demag Haitian is the pioneer of Sino-European collaboration in injection machine manufacturing, having started up in 1998. The joint venture expected to ship more than 300 injection machines in 2003 according to Greif. Demag Haitian is relocating in April to a new facility that will double capacity to 600 units (December 2003 MPI).
Husky (Bolton, ON), meanwhile, started making hot runner systems in Shanghai in November 2003, and marketing VP Jeff MacDonald says the manufacture of Hylectric machines up to 3000-kN clamp force will start at the facility within the current calendar year. "The market demands speed, and first and foremost, we are manufacturing in China to be closer to our customers," says MacDonald. "If we can deliver machines within weeks, we''ll get more business." He says cost issues are secondary.
He terms the initial manufacturing initiative "incubative production" in that Husky will learn which components can be sourced locally and what benefits are derived in terms of delivery time.
Fellow hot runner producers Mold-Masters (Georgetown, ON) and Plastic Engineering & Technical Services (Auburn Hills, MI) have also opened manufacturing facilities in China. The latter plans to use the China facility to develop hot runner manifold system components to be assembled in the U.S.
Ube Machinery Corp. (Ube, Japan), meanwhile, inked a 10-year licensing deal with Hong Kong''s Cosmos Machinery Enterprises (Group) Ltd. in March 2002 in which the latter manufactures large injection machines under the Grand Tech-Ube badge in Wuxi, China. Ube reports smooth progress since production started in August 2002.
Changhong Appliance (Sichuan, China) recently took delivery of eight Grand Tech-Ube machines with clamping forces ranging from 10,000 to 25,000 kN. The firm is China''s leading TV manufacturer and had used Chinese and Japanese machines previously. Machines built under license feature fewer options. Injection-compression molding, for example, is not available.
Kawaguchi Ltd. (Shimizu, Japan) is also planning production of injection machines in China starting early this year. It plans to form a joint venture with Hong Kong''s Century Win Enterprises in Shanghai.
Other Japanese injection machine suppliers manufacturing in China include Toshiba (Tokyo), which produces all-electric machines at a wholly owned subsidiary in Shanghai, and Mitsubishi (Tokyo), which outsources production to Hangzhou Jinnong Machinery Mfg. Co. The Chinese firm assembles hydraulic injection units, clamping units, and control panels for 350- to 850-tonne presses at a custom-built facility in Hangzhou, Zhejiang Province. The subassemblies are shipped to Mitsubishi''s plant in Nagoya, Japan, for final assembly and quality assurance. Annual production of 200 machines is targeted. All components are sourced locally except the screw and the machine controller. Full local manufacture in China is planned.
Extrusion equipment consolidates foothold
In the extrusion field, Reifenhauser (Troisdorf, Germany) has announced that it will establish a manufacturing presence in China. The wholly owned operation will start manufacturing "special edition" small, three-layer lines (1.7 m wide, 450 kg/hr) at Suzhou, near Shanghai, with the first machine to be exhibited at Chinaplas in Shanghai in June. The machine will be sold in other developing economies such as South America, Russia, and Egypt.
"The goal is to procure as many parts as possible locally in China," says managing director Klaus Reifenhauser. The standardized machine will feature no high-tech options, but there will be no compromise on quality. The sales target is six lines in the first year, then 12 to 15 in the following year. Eventually, sales of more than 20 lines/yr are targeted. "It will take time for the China market to accept the machine," says Reifenhauser.
Also in extrusion, Battenfeld Chen Extrusion Systems (Foshan, Guangdong Province) extended its line at the end of 2002 to include blown film lines and has received eight orders to date, with three having already been installed. Except for the controller, all components are sourced locally.
The company, a joint venture between the SMS Plastics Technology Group and Hong Kong''s Chen Hsong, also supplies pipe, profile, and sheet extrusion equipment, and a full order book and extended product range prompted the firm to expand its plant. A new 8300-sq-m facility and technical center was due for completion this month. "Manufacturing should be transferred to the new facility from existing operations at two leased factories by April," says Battenfeld Chen Chairman Harold Wrede. Battenfeld Chen also develops its own machinery; the latest addition unveiled at Chinaplas was the BCE 2-72 C active conical twin-screw extruder (see Product Watch, p. 73)
Biaxially oriented film line maker Bruckner Maschinen-bau (Siegsdorf, Germany) is another firm sourcing local components to cut costs. Non-critical parts such as oven frames, insulation panels, ductwork, and sheet metal work have been sourced from subcontractors for two years. "Local procurement of these labor-intensive parts has enabled savings of about 30% to 40%," says Phillip Chen, managing director of Bruck-ner Far East (Hong Kong).
Bruckner recently established a subsidiary, Bruckner Machinery (Jiangyin) Co., in Jiangsu Province, to further develop its service presence and local procurement efforts in China. "China-sourced parts are already exported, and we plan to increase the scope in China," says Chen.
Extrusion blowmolding machine supplier Krupp-Chen (Foshan, Guangdong Province) is now a wholly owned subsidiary of SIG Blowtec (Troisdorf, Germ-any) after SIG acquired the shares of Hong Kong''s Chen Hsong. The name will be changed to SIG Blowtec China, and it will relocate to a new facility in Foshan.
The latest offering is the KCC-III multipurpose shuttle machine. Key components are made in Germany. The performance is similar, but half the cost. SIG Blowtec plans to attain CE certification for the machine as it wants to market it as a low-cost alternative in Europe and the U.S., according to Area Sales Manager Walter Andersch.
In robotics, Wittmann Kunststoffgerate (Vienna, Austria) plans to start building its W720 two-arm robot and Drymax 30 dryer in late 2004 in Kunshan, China. Major components will be sourced from Europe.
Stephen Moore [email protected]
Battenfeld Chen: www.bce.battenfeld.com
Chen Hsong: www.chenhsong.com.hk
Cosmos Machinery: www.cosmel.com
Plastic Engineering & Technical Services www.petsinc.net
SIG Blowtec: www.sigblowtec.com