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Find out how Hong Kong and China are leading the way in plastics

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Cheung Kong

Great Wall Of China

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Rick Shaws

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Hong Kong & China

Hong Kong And China Leading The Way For Plastics

Following the launch of China’s economic reforms in the late 1970s, the country’s plastics and Moulds industries are booming. Over the past 10 years, China has become the second largest plastics producer and the third largest Moulds producer in the world. China’s competitive advantage lies in common plastic products and low-cost mold manufacturing, while its capacity and experience in precision, long life and high efficiency Moulds manufacturing is still relatively weak. Ten years ago, China was the forth largest producer of plastic products in the world. Today, China is second only to the United States. This new ranking comes after a year-over-year increase in production of 12.9 percent in 2005, with output of plastic products totaling 22 million tonnes in 2004. This compares with a global rate of growth of 3 percent during the same time period. According to China’s Light Industry Information Center, there were more than 700 plastics companies in China with sales exceeding 100 million yuan in 2004, and more than 24 companies with sales exceeding 1 billion yuan.

Global customers driving growth and technology advances

A key driver of China’s plastic industry growth has been the number of multinational corporations that are entering the market and utilize plastic products in their business. These companies, which specialize in industries such as automobiles, children’s toys, electric appliances, packaging and information technology, will continue to fuel demand in China’s plastics industry.

New products that incorporate new technology and processes have vastly improved China’s plastics industry capabilities. Ten years ago, Chinese plastic companies only had the ability to produce the simplest products. Today, many large private and joint venture companies use advanced technology, including hot runner systems, gas-assist injection processes and insert-molding. A few companies have begun to use MuCell technology. In addition, reaction-molding technology is in the process of being tested in China. Among mold manufactures, the precision of Moulds has improved from 5 microns to 2 microns and will soon reach 1 micron. Most mold companies now have the ability to use 2D/3D software to design and analyze Moulds .

Injection-molded plastic parts from China offer significant cost advantages over Asian and Western competitors. Compared to Europe and the United States, the average price of injection plastic parts in China is 40 percent to 60 percent cheaper. In Asia, Chinese parts are approximately 30 percent cheaper than Japan and 10 percent to 20 percent cheaper than those found in Singapore, Taiwan and Hong Kong. As a result, private companies in China are the leaders in both quantity and sales among injection-molding companies. Recent investment by U.S. and European companies, transferring new technology and processes and better management, has further solidified China’s position as the leader in this plastics sector.

In 2005, China’s output of Moulds (including stamping tools, die casting Moulds, etc.) was 61 billion yuan, representing a 15 percent increase over 2004. With global output totaling 557 billion yuan, China ranks as the third largest mold producer, behind the United States and Japan. China’s export value of Moulds was 6.08 billion yuan in 2005. Imports equaled $16.77 billion yuan, driven by high quality and complex Moulds, such as those used in multicavitation, multimaterial and multicolor Moulds. Other significant contributors to China’s mold imports include precision, long life and big stamping tools used for the production of automobile components. These imports largely come from Japan, South Korea and Taiwan.

China is quickly becoming a leading manufacturing center for plastics and Moulds. Increasing numbers of global companies, such as HP and Dell, are relocating their manufacturing centers from South Asia and Taiwan to China. Combined with the rising demand from auto and auto component companies, who are expanding capacity in China, the demand for plastic parts and Moulds will continue to grow at a fast rate.