Machine makers roll out expansion plans in China

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The Chinese injection moulding machine market has undergone a transformation where more hightech machines are being produced domestically. This trend was started by foreign machine makers that are now on an expansion drive, as observed at the recent Chinaplas 2014 show.

More locally made machinery

In 2013, China’s total consumption of plastic machinery (excluding parts) was valued at RMB49 billion, compared to RMB49.3 billion in 2012. Of this, imports constituted 23%, compared to 27% the previous year, while local machinery produced was 77%, over the 73% from 2012, according to China Plastics Machinery Industry Association (CPMIA).

Meanwhile in 2013, imports of machinery from countries like Japan, Germany, Taiwan and Italy were all down, against 2012 data, with the exception of South Korea.

China’s processing market grew by 14.3% reaching USD304 billion in 2013. Hence, the domestic market constitutes the largest sales market for Chinese plastics machinery makers and grew by 12% or a value of RMB42 billion in 2013.

China’s largest injection moulding machine maker Haitian International Holdings also recorded higher domestic sales of 18.8% in 2013. But according to Helmar Franz, the company’s Chief Strategy Officer, who was speaking at a media briefing, a slower growth of 5% is expected for 2014, with more challenging times expected.

Full speed ahead for Engel and Demag China

Even with the slower growth expected there is no letting up in plans for expansions.

Austria-headquartered Engel Holding is setting up a 22,000 sq m production plant in Changzhou, Jiangsu, through its 100%-owned subsidiary, Wintec Engel Machinery. With 100 employees, the plant is targeting a capacity of 300 machines/year.

The core target market will be China, as well as processors in Southeast Asia, South Korea, Taiwan, and India. “Wintec will appeal to processors looking for relatively standardised machines with a limited range of options,” said CEO Peter Neumann, speaking at a media briefing. He also said with Engel’s market share of 11% in Asia, “there is room for growth.”

Wintec will target the large commodity applications segment and will supply machines that will be different to Engel’s product range, offering reduced modularity and a smaller range of options. With the reduced complexity and specifications, the firm says it will be able to offer more competitive prices and with short delivery times.

Basically, it intends to capture the market share currently occupied by Asian suppliers from Taiwan, South Korea and China. “We are entering a segment competing with Asian machines and not Western machines; the price value correlation will show that it is worthwhile for customers to invest in a Wintec machine rather than an Asian one,” said Neumann, adding that all the parts will be made locally, except for the controls that will come from Europe.

Engel already operates a facility in Shanghai for producing large machines. “The reason why we decided to start a second facility is to focus on three main applications: white goods; automotive and technical parts,” added Neumann. Wintec is also establishing a completely independent sales and service structure in China.

Another European supplier that already has a facility in China and is on an expansion mode is Demag Plastics Machinery (Ningbo), a 100% subsidiary of Sumitomo (SHI) Demag. It recently broke ground on a EUR7 million facility, located around 10 km from its existing plant in Ningbo. With a built-up area of 12,330 sq m, the plant will come on stream in July 2015. It is expected to have a production capacity of up to 1,000 machines/year from its current capacity of 650 machines/year.

Stephan Greif, CEO Demag China, said that since its establishment in 1998, Demag Ningbo has been operating on rented production sites. The new facility will be the company’s first own site and is expected to boost the company’s global growth.

Demag Ningbo is currently producing the Systec C machine series, which is available with clamping forces of between 50-1,000 tonnes. In July 2015, additional machine series are planned to enhance the product portfolio in China.

The company also envisages increasing its exports, currently at 25%. In addition to local processors, Demag Ningbo supplies markets in Southeast Asia, the Middle East and Latin America.

KraussMaffei and Milacron expand their facilities

Another machine maker that is reaping the bountiful growth is Germany-based KraussMaffei. “China is the fastest growing market (growing at a double digit growth) for us,” said Christian Blatt, CEO of KraussMaffei China. In view of this, the firm has inaugurated a second production hall at a current facility in Haiyan. With this expansion, the production space has been doubled to 22,000 sq m.

Its target is to produce 300 machines/year and it has already produced 50 machines at the Haiyan plant it set up last year, which “is still at the ramping up stage”, said Blatt, during a media briefing. It is producing the MX series, in a range of 850-3,200 tonnes, for the Asian market, targeting the automotive, packaging and electronics sectors.

Using optimised production processes, the output times are shortened by almost half, which is welcome news for customers, explained Blatt. Added to this are the time and cost advantages since there is no need to transport items from Europe, along with a faster availability of spare parts and a service package that is tailored to meet local needs, emphasised Blatt.

When asked if other types of machines will be produced, Blatt said the GX series would “come later”. Shown at Chinaplas was a new GX Spinform, with cube form technology on a swivel platen machine. It was demonstrating the production of a PP/LLDPE push-pull closure in a cycle time of 6.4 seconds.

KraussMaffei has been present for more than 13 years in the Chinese market. It started off producing extrusion machinery in 2006, adding on rubber equipment in 2009 and reaction process machinery in 2011. “We have a strong market presence in China with three strong brands: KraussMaffei, KraussMaffeiBerstorff and Netstal,” added Blatt.

Subsidiary company PET machine maker Netstal is also considering assembling machines in China, said CEO Hans Ulrich Golz, adding that a local operation would be set up to replicate the Switzerland facility. Swiss-made Netstal machines have been sold in China for 11 years.

To strengthen its presence further, Netstal has now opened a demonstration and training centre, with test facilities, at the Haiyan plant. It houses a fully electric 220-tonne Elion machine, which demonstrated production of blood collection tubes during the new plant inauguration. As a demonstration plant for the beverage industry, Netstal also installed a complete PET-LINE system with cooling and drying units back in September 2013. Moreover, in order to offer its customers better local service, it will also stock up spare parts for the market.

US-based Milacron also announced that it is doubling the capacity of its China factory to produce 950 injection moulding machines/year, and will start manufacturing extrusion and blow moulding equipment at a later stage.

Milacron President/CEO Tom Goeke was quoted as having said that the first phase would comprise the production of hybrid machines followed by machine models that are currently manufactured in the US and India and Europe.

The investment of up to US$5 million in its Milacron Plastics Machinery (Jiangyin) facility in Jiangsu province will open in July, and aims to tap more heavily into growth in China, Goeke said.

The company already produces the Elektron all-electric series in China and will expand the range from 30 tonnes to up to 650 tonnes clamping force. Servo-driven versions of its hydraulic Maxima series are also being manufactured at the current facility. It will also begin exporting the China-made Elektron series to the US, even though the growth of the Chinese facility is primarily driven by the local Chinese market, which accounts for about 80% of sales, according to Goeke.

Meanwhile, the demand for all-electric machines is growing in China, with 18,821 units sold in 2012 (according to research firm Interconnection). Hence, Milacron is banking on the growth to expand its small market share in allelectrics to more than 10%.

Arburg sells more to local processors

But not all foreign machine makers are in a hurry to set up local production in China, resorting instead to expanding support services.

German machinery maker Arburg operates two subsidiaries in Shanghai (since 2004) and Shenzhen (set up in 2006) that sell made-in-Germany machinery.

Against the growth of the domestic processing sector and the requirement for higher technology, the company has witnessed a changing trend. “While customers were mainly global players to begin with, around 80% of our customers are now local businesses who are increasingly using our high-tech machines,” said Max Man, Managing Director of Arburg China, adding that the focus is on the booming packaging and medical technology industries.

In view of the growing demand, Arburg is expanding its premises in Shenzhen to provide more support. “We will move into our new 1,250 sq m premises, affording us significantly more room in which to offer our customers even better support. The showroom alone measures 200 sq m, providing space to demonstrate three sets of Allrounders. Furthermore, there’s a machine stock room with capacity for up to seven Allrounders; to allow instant order delivery,” explained Man.

Another milestone last year was the opening of its machine warehouse in Shanghai. A range of electric, hybrid and hydraulic Allrounder machines are available and can be adapted to specific customer requirements as required. “This helps us achieve extremely short delivery times, making us faster than local providers,” claimed Man.

At Chinaplas, Arburg displayed its Allrounder series, hybrid machine and a vertical model. It also had product and sector-specific machine configurations for the key industries in China such as packaging, medical technology and electronics as well as the production of IML packaging and syringe barrels with short cycle times and the processing of Hotmelt material.

Chinese machinery makers cashing in

Haitian is opening two new plants in Ningbo, said Franz at the media briefing. The 120,000 sq m plant for the company’s production of fully electric machines has started up while the second 150,000 sq m-plant for large-size two-platen machines will start up next year.

The new facilities are required since demand for Haitian’s machinery is growing, having delivered 27,000 machines in 2013, compared to 22,000 units the previous year. It boasted 13.7% higher turnover of US$1.2 billion in 2013. The export business also grew by 3.6% and also set a new peak of US$340 million. Especially positive in 2013 were higher sales in Southeast Asia, Middle East, Africa, and US.

Its best seller continues to be the servohydraulic Mars series, of which it has sold 100,000 over the past six years, said Franz. In the fully-electric sector, Haitian subsidiary Zhafir Plastics Machinery is seeing continuing success with the Venus series, having sold 1,000 machines last year.

At Chinaplas, Zhafir also presented its new electric Zeres machines, based on electric technology and equipped with an integrated hydraulic unit. Other new exhibits from Haitian were a high-performance version of the Mars with 170-480 tonnes clamping force for thinwall packaging and a high-performance two-platen Jupiter model with clamping force from 1,000-1,600 tonnes.

Meanwhile, to cater to its clientele in Qingdao another machinery maker, Ningbo Haitai Machinery is targeting the opening of its second facility by the end of this year, said a spokesperson. Haitai currently operates from a 150,000 sq m facility in Ningbo where it produces about 20 different models. It also exports around 70% of its machine output.


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