2013 Exhibitions
There is a dramatic shift of machine industry activity from the west to the east during the past five to ten years, with China in the lead, according to an industry study by STM Stieler, a Germany-based market consulting firm, which conducted this study involving respondents of 95 plastic machine and 25 rubber machine manufacturers in China.
China rules the roost as largest global production base and market for plastics and rubber machinery, doubling its share in the world production of plastics and rubber machinery between 2007 and 2011, while the share of all other major producers dropped.
Ningbo Haitian, the country’s largest plastic injection moulding machine maker is currently also the world's largest manufacturer in this field; and 14 amongst the global top 30 rubber machinery companies are Chinese.
Nearly two-thirds of plastic machine imports come from Germany and Japan. The total value of imports increased in recent years, an indication that the value of imported machinery increased.
The study also indicated a significant difference between the average price of exported and imported machinery. Imported injection moulding machines cost on average three and a half times, extruders and granulators even 30 times as much as exported Chinese machines from the same category.
Injection moulding machines account for 50% of domestic production in 2011, followed by extruders (including granulators and blow-moulding machines) with 38.7%, whereas the rest were other types of machines such as thermoforming.
Citing a data of the China Plastics Machinery Industry Association (CPMIA), there were 546 domestic manufacturers of plastics machinery in 2011, of which, 77 homegrown companies and 18 international ones have been identified as potentially lucrative.
A fragmented success
Nonetheless, the Chinese machinery industry is still very fragmented, said the study. The largest 10 companies account for only 39 % of sales in the entire industry. Some 16 specialised Chinese companies with sales from RMB 100 to 500 million have international expertise, superior technology and easier access to capital whilst a larger number in the industry comprised smaller companies. The study projects an increasing consolidation within the entire Chinese plastics and rubber machinery in the future.
The extruders and blow moulding machines segment is is smaller than that of plastic injection molding machines. In the field of twin-screw extruders, pipe production and multilayer extrusion lines, Chinese manufacturers seem to have caught up with the international level. Companies like USEON announced that they were competing with well-known German manufacturers like Coperion or Leistriz.
Some 14 domestic companies engaged in rubber machinery account for about 50% of the total sales in the industry, comprising 210 companies, plus 11 foreign manufacturers. Main product groups are tyre building machines, rubber mixing and extrusion machines (including calendars) and vulcanising machines.
Manufacturers of tyre building machines in the lower market segment are still grappling with the impact of 2009 crisis, nonetheless, leading companies such as Mesnac or Dalian Plastics and Rubber Machinery are growing strong. In the segment of mixers, Yiyang has acquired the patents for the mixer technology from German Krupp and competes with US-based Farrel for the worldwide leading position in this segment. The market for vulcanising machines is very concentrated: Two state-owned companies share 80% of the domestic market in this field.
Past developments
During the 11th Five-Year Plan period, the Chinese plastics machinery industry did not only double its production volume, but partly also achieved significant qualitative progress. In 2007, Ningbo Haitian introduced three competitively priced all-new model series of injection moulding machines, which are able to serve 80% of all applications in this area. The machines fetch good sales domestically and internationally. In the US alone, sales grew by 500% from 2006 to 2011.
With production facilities in Germany and Vietnam, R&D centres in Germany and Japan and a German member of the board, Ningbo Haitian has the most global reach Chinese manufacturer of plastic machinery.
Meanwhile, other companies have also followed suit. Five manufacturers put up production sites in other emerging markets (India, Mexico, Vietnam, Russia); Five manufacturers have R&D partnerships with companies in Japan, Europe or North America; Five have R&D centres in Europe, North America or Japan; and three Chinese plastics machinery manufacturers have taken over companies in Europe and North America. Moreover, acquisitions also continue to rise.
Industry challenges
Despite these milestones, the Chinese industry is still faced with several challenges that could impact its standing in the global market in the near future where growth is expected to come from the mid to high quality (machinery) segment. For one, majority of the local companies still produce simple and cheap machines. Weak branding, a lack of intellectual property rights that inhibits the willingness to invest in R&D, and low level of automation in production are also observed ; Lack of qualified human resources bear low innovative power as well as short-term thinking on management and staff level; and strong dependency on foreign components in the areas of control systems, hydraulic pumps, valves and motors also slow down advancement. While reforms in the coming years are critical and could predict China’s stature as either a powerful high-tech destination or a mere middle income trap.
Supported goals
The Chinese government and relevant industry associations have recognised these challenges and addressed these accordingly, prioritising their target of making the country a high-tech manufacturing location. Besides a number of general plans and documents for the entire industry, the government explicitly mentioned the plastics machinery industry as eligible for governmental support and defined some development goals during the past three years. These goals concern primarily the development of larger, more energy-efficient and precise machines as well as machines for the processing of new composite materials.
A slow paced growth
Capacity expansion in the automotive, medical, energy and environmental technologies sectors, as well as the development of new industries like aircraft and railway construction are resulting in a growing demand for high-end machines. Staving off dependency on foreign companies, Chinese manufacturers of plastics machinery are eager to serve this segment by themselves. Some companies undertake modernising and expanding their production facilities, to cater to domestic and overseas growth markets.
The Chinese Rubber Machinery Association expects an average growth rate of 10-20% per year until 2016 and also an increase in the global market share of Chinese producers from 33.5 to 50% by the same period; whereas the CPMIA aims at an average annual growth of 12% until 2016. Beyond these projections, advancement is slow: To date, there have only been two expansion projects undertaken for the production of new machines. In a reality check, machine manufacturers have remained skeptical about the industry’s future.
(PRA)
