Guangdong Yizumi Precision Machinery Co is one of China’s largest injection molding and die casting machine makers. The company is going to finalize the site location for its first manufacturing facility in India this year, a key component of its planned expansion overseas. Machine maker has big plans to expand into key foreign markets after moving into India, reports Li Wenfang in Foshan, Guangdong.
Guangdong Yizumi Precision Machinery Co, one of China’s largest injection molding and die casting machine makers, hopes to finalize the site location for its first manufacturing facility in India this year, a key component of its planned expansion overseas. Deputy General Manager Zhang Tao said the Indian site will allow the company to access the country’s growing injection molding machine market, without having to pay hefty import taxes levied by the Indian authorities on China-made products to tackle dumping. Zhang said the company views India as an important market with significant potential. The country’s manufacturing industry continues to grow rapidly, in the plastics and light alloy sectors, particularly, but also automobile and motorcycle production, with the still relatively low per capita consumption of industrial products.
Yizumi launched a service center in India last year, and the country is already its largest overseas market for casting machines, worth $4.12 million in exports last year. Targeting the middle to high end of the market, the new Indian production facility will initially assemble parts made in China, but will soon depend on local part procurement. The latest statistics showed just what a growing presence Chinese-made plastic machinery is enjo ying. According to figures from the German Engine ering Association, Chinese exports of plastic machinery surged by 23 percent last year.
Separately, the China Plastics Machinery Industry Association now claims China-made plastics machinery make up more than half of global production. “Previously many were in mostly the low to middle end of the market, but exporters are now moving into the middle to high end,” said Su Dongping, the CPMIA’s secretary-general. Su said Haitian International Holdings Ltd, which manufactures and distributes plastic injection molding machines, is now considered the world’s largest plastics machinery maker.
“Companies with sufficient capital and research have plenty of opportunities to establish plants overseas,” he said. Yizumi was listed on ChiNext, China’s Nasdaq-style board, on the Shenzhen Stock Exchange, in January this year, and Su said many medium-sized companies are planning to set up their own manufacturing operations abroad, after going public. Yizumi’s Indian project will become its second investment overseas, following its acquisition in March 2011 of Hydraulic Press Manufacturing Co, the century-old United States machinery maker. Six months after that takeover, it established HPM North America Corp, and then purchased another company, BIVOUAC Engineering Service Co.
HPM North America has since launched a series of new designs and had its manufacturing function shifted to Foshan, Guangdong province, where Yizumi has its headquarters. The subsidiary recorded $5 million revenue between July 2011 and the end of 2014. Zhang said he sees significant potential for the offshoot, based on the favorable recovery of manufacturing in the US, and substantial growth in machinery exports from China to the US in the past two years. The company plans to expand its network of local distributors to enhance sales and rent more warehouses to speed up delivery and improve after-sales service, he said.
Over the past two years, Yizumi has become China’s largest cold chamber die casting machine exporter and the fifth-largest injection molding machine exporter. Its overseas sales rose by one-fifth year-on-year last year and now account for 15 percent of revenue. The company’s total revenue increased 12.6 percent to 1.175 billion yuan ($193 million). The company now sells its products in more than 50 countries, Zhang said, and has the potential for more, driven particularly by robust demand from major markets such as South Korea and Turkey. He said that rising manufacturing volumes in highly populated countries, including India, Indonesia, Pakistan and Bangladesh, which offer ample supplies of labor, will help it continue to grow. Zhang also sees opportunities being created by China’s strategy of developing the Silk Road Economic Belt and 21st Century Maritime Silk Road, which he said will have a significant impact on the economies of related countries.
“We will be paying close attention to those markets. Our future growth in overseas markets should exceed 15 percent,” said Zhang.
Su Dongping also said China’s plastics machinery sector is poised to benefit from the ongoing national initiative of encouraging overseas expansion by Chinese manufacturers, a policy underlined again at the start of the year by the State Council. He Hezhi, a professor with the School of Mechanical and Automotive Engineering of the South China University of Technology, said the standard of China-made whole sets of injection molding and die casting machines sits around the middle in international rankings, but some of the technology coming out of its factories are considered state of the art. According to Zhang, Yizumi will continue to step up its overseas marketing efforts, grow its service network, and create innovative products targeted at specific global markets.
Overseas expansion, he said, has become all the more important as China’s economy adapts to the “new normal” condition of slower and sustainable growth. He said the national plan “Made in China 2025”, for upgrading the manufacturing sector, will help in expanding the development of the machinery industry. He Hezhi, too, said the plan will boost the machinery sector by focusing manufacturers on developing better levels of automation, and by embracing Internet-powered operations. Zhang said that he is hoping for growth especially from the medical apparatus, telecommunications and packaging sectors, both at home and overseas. Yizumi is planning to allocate more resources to those products.
It will unveil a new industrial robot subsidiary this year, after it launched one for packaging machines last year, he said.
With the company’s financing costs cut after it listed on ChiNext, Yizumi’s capacity will double to 10,000 sets of equipment this year, helped by the completion of a new site in Wujiang, Jiangsu province, he said. The company sold about 4,500 sets of injection molding and die casting machines, and more than 150 sets of rubber injection machines last year.