21 Oktober 2008

China: WPC manufacturer announced investment of US$ 191 million

Growth of domestic WPC market expected to slow down

According to a PlasticsNews report from the China International Forum on Wood Plastic Composites in Shenyang, the fast growth of the chinese WPC industry is showing signs of a slow-down. Despite this, a chinese-canadian company has announced plans to invest in three huge WPC factories in China.

WPC firms heavily involved in exporting are seeing slowdowns, as the housing crisis takes its toll in the United States and Europe, and the rising yuan, new labor laws and other domestic issues in China risk putting a damper there. One of China’s largest WPC firms, Qinchuan Future Plastic Machinery Co. Ltd., said that the slowdown in the United States and Europe is having a big impact on exporters. China’s domestic building industry, a key market for WPC windows, doors and decking material, has not yet slowed down. Some exerts, however, expect a delayed effect of the global crisis on China’s domestic markets.

Still, investment in WPC continues. Demand is still projected to grow more than 60 percent in the next two years, as China keeps building and the industry gets a lift from WPC products in high-profile events like the Olympics, the World Expo Shanghai in 2010, and the 2010 Asian Games in Guangzhou.

China makes 331 million pounds of wood-plastic composites each year, compared with 1.7 billion pounds in the U.S. Industry officials estimated loosely that the industry in China could grow to 551 million pounds of production in two years.

Company announces huge investment in WPC production
As PlasticsNews reports, the Chinese-Canadian wood-plastic composite (WPC) maker Shenyang Grace World Composite Materials Co. Ltd. has said it plans a 1.3 billion yuan (US$191 million) expansion that, if fully realized, would make it one of the largest such manufacturers in the world. The company said it will use money from U.S. and European investment banks to build three mega-factories in China by the end of next year that will give it a capacity of about 661 million pounds a year.

Shenyang Grace World, a joint venture of Canada Kind Corp. in West Vancouver, British Columbia, and Chinese state-owned oil company Sinopec, currently has a production capacity of just 13.2 million pounds, at one factory in Shenyang. It presently manufactures pallets, outdoor flooring, packaging and products for automotive and military applications, with some of it exported to the United States and Europe. Company officials said they are targeting the expansion at both domestic and overseas markets, with a growing focus on domestic markets.

Some industry executives privately questioned whether the company realistically could move ahead with all of the massive expansion. Without commenting on any specific companies, one Chinese executive said that since WPC is favored by the government, it can be easier for companies to hold on to land if they say they will be putting in a WPC factory.

Further information

Source: Plasticsnews, 2008-10-20.

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