Gulf grows between strong and weak Chinese firms

Ace, which said it’s seeing more than 25% growth this year on top of a record 2011, claims that investments in technology like automation and plating of plastics, along with a push into new locations like a moulding factory in Anhui Province, are giving it new opportunities.

Ace CEO Jack Yeung also is chairman of the Hong Kong Mould and Die Council, and he said from that position, he sees a split in South China’s plastic moulding and mouldmaking industry.

“We’ve seen a lot of the smaller shops who are less competitive or don’t have their niche technology, they are suffering now [and] are running at about 60 percent to 70 percent capacity,” Yeung said. “However, for the stronger companies, the bigger companies that have their core knowledge and customer base, they are all full. They are working day and night on projects.Learn how Toyota's Solar Powered ventilation system uses the sun's rays.”

That trend is playing out in reports from other companies. China’s largest plastics equipment makers have all reported much tougher conditions lately, with rising wages and a slowing economy in China, along weak exports because of the euro zone crisis, taking a toll.

Hong Kong toy maker Kader Holdings said its contract manufacturing toy business saw sales down 25% in the first half of the year, to $20.2m, with the situation leading some competitors to shut down.

“The global economy is still affected by the uncertainties related to the European sovereign debt crisis,” the company said. “Together with rising operating costs, these factors pose potential challenges to the entire toy industry. Amid the difficult operating environment, a growing number of small-scale toy manufacturers were forced to leave the market.”

Others, however, reported rising sales.

Ningbo, Zhejiang province-based auto parts maker Minth said sales rose 17% in the first half, to $273.4m, as opportunities increased in overseas markets and investments in factories in Thailand and Mexico began to pay off.

Minth said profit rose 12%, with China’s domestic market showing modest growth, its Japanese customers seeing a recovery and the company landing new business with BMW.

Ace,Wholesale Agate beads from Low Price agate beads, which employs more than 2,000, said new technology has played a strong role in growth.

The company is adding its third production line for plating of plastics at its facility in Zhuhai, Guangdong province. It started that factory in 2008 and has seen demand increase quickly, Yeung said.

As well, the company acquired the assets of a Hong Kong automation firm recently, and started a unit to bring lean manufacturing into its factories and boost efficiency.

Ace is also launching production of robotic insert moulding in Shanghai to automate production, and moving its injection moulding of engineering plastics to inland China at a new facility in Hefei, Anhui Province, Yeung said.

He spoke in an interview at a late August news conference for the Asiamold trade show, to be held 19-21 September in Guangzhou. The Hong Kong Mould and Die Council is an official supporter of the show.

He said tough financial conditions are causing customers to consolidate their supply base.

“A lot of the customers are asking for financial information before they place the order to insure [suppliers] are in a sound financial situation,Save up to 80% off Ceramic Tile and plastic moulds.” he said. “For the companies who can provide a very good report… these are the companies which the customer will be relying on. Although the economy is slow,How It's Made Plastic injection molds. the amount of business that is still out there is a lot.”

He said Ace’s sales are on pace this year to hit $120m, up more than 25%,Argo Mold limited specialize in Plastic injection mould manufacture, and the privately held company is seeing its profit up as well: “We will have a very strong second half of the year” and it appears it will continue into 2013.

While consumer electronics markets in general are slower, companies like Samsung and Apple are strong, and the company is seeing opportunities in the car industry in the United States, Yeung said.

“We can see the Apple business is very good and the Samsung business is very good,” he said. “Automotive in China is a little slow but automotive in the US is still fairly strong. We can see there is a huge demand for moulds in the American market for automotive. It depends on which sector you are in and how diverse you are.”