Chinese plastics enterprises show signs of recovery
Release time:2021-02-23 06:53 Reading times:913

While manufacturing companies around the world are still looking for signs of economic recovery, China's local plastic companies seem to have gradually come out of the trough, thanks to the large-scale economic stimulus plan of the Chinese government. Leading plastics companies in the industry say their business in the domestic market is returning to pre crisis levels. It is predicted that the plastics industry will resume the overall level of double-digit growth in the second half of this year.

   however, any possible recovery is likely to be unbalanced and fragile, because overcapacity in manufacturing enterprises is still serious, and China's export market is still struggling, especially in manufacturing centers such as Guangdong Province.

   However, some enterprises believe that domestic demand will remain strong, especially in the local construction, automobile and electronic markets.

   According to Willis Guan, vice president of global sales and marketing of Jinfa Technology Co., Ltd., China's largest composite manufacturer and headquartered in Guangzhou, Guangdong Province, "judging from our orders, we can say that we are basically out of the recession."

   However, like other colleagues, he also said that it is difficult to say whether the improvement will last long, because sales only began to return to the pre crisis level in the past one or two months.

   Ningbo Haitian Plastic Machinery Group, China's largest maker of injection molding machines, said its domestic sales had climbed to pre crisis levels since April.

   a manager of Haitian told plastic news at NPE2009 that the 4 trillion yuan stimulus package introduced by the Chinese government has helped consumers regain confidence and eventually boosted the recovery of orders. However, he also said that Haitian may be in a much better situation than other domestic manufacturers due to the updated product mix.

   we can see some signs of economic recovery from the statistics. China Plastics Processing Industry Association, China's largest plastics trade group, predicted in June that the growth of the industry in the second half of this year will increase from slightly more than 9% at the beginning of the year to more than 10%.

   According to China's Ministry of industry and information technology, the output of plastic final products has increased by more than 7% in the first five months of this year, despite a 12% decline in exports over the same period. More broadly, China's GDP growth in the second quarter increased to 7.9% from 6.1% in the first quarter.

   from this growth trend, it can be seen that Chinese enterprises are getting rid of the dependence on exports and paying more attention to the domestic market.

   "We've seen some structural changes in China's plastics processing industry, and our customers are beginning to borrow the domestic market to make up for the decline in exports, which has driven demand growth," said hermar Franz, executive vice president of Haitian Group, which is headquartered in Ningbo, Zhejiang Province. Chinese molding enterprises can quickly adapt to the new environment. "

   However, for some export-oriented enterprises, the situation is still very serious.

   Alfred Au, vice president of the Hong Kong die & Mould Association, said export businesses such as mobile phone and electronic die & mould production had declined by 50%. He said that there is obvious overcapacity in China's manufacturing industry. Victor lo, an industrialist in Hong Kong, agrees. He estimated in June that about 30-40% of the capacity in South China, which is mainly export-oriented, is overcapacity.

   "Most of the manufacturing companies in this region are now using only 30-40 percent of their capacity," Au said He believes that this change is permanent, and the glory and prosperity once enjoyed by Chinese manufacturing enterprises will never return.

   "I think the golden age is over," said Au, who is also the general manager of British model technology in Hong Kong. It's not a matter of seasonal decline. We are facing a more complex situation than ever before. "

   Nanjing jieente mechanical and Electrical Co., Ltd., a Chinese extruder manufacturer, said signs of recovery were emerging. At present, the company's sales volume is about 80% of the pre crisis level, far better than 50% at the beginning of the year.

   Huo Qingxian, general manager of the Nanjing based company in Jiangsu Province, said it was unclear whether the situation would continue to improve in the coming months. He said that the company's business is still not completely improved, and customers are constantly asking for a big price reduction: "everyone is waiting Everyone wants to cover their pockets

   some of the companies interviewed revealed that they were investing.

   Guangzhou Jinfa plans to build a new bioplastics plant in Zhuhai, Guangdong Province. Yixinghang Co., Ltd., a Hong Kong Composite manufacturer, is preparing to build a small factory in Tai Po, Hong Kong, to take advantage of the tariff advantages of the closer economic cooperation agreement signed between Hong Kong and the mainland.

   AnthonyWong, director of Yixing Xing, told the US Plastics News that its Chinese mainland business has reverted to pre crisis levels, and is still growing steadily. Meanwhile, its export business is showing some signs of recovery, though this is not obvious.

   However, he said that in short, China's economy is not isolated, and whether it can get better depends on the recovery of other countries in the world: "the future direction of China's economy is still closely related to the global economy."

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