A. Schulman expands in China with new plant

Materials maker A. Schulman is opening a new plant in China for producing colour concentrates that it said would eventually include compounding for masterbatch and engineering plastics in the next four years.

The US-based firm said that while the initial investment – $5m (£3.43m) – was small, the total investment in the factory, which opened officially today, could reach $30m (£20.6m).

Derek Bristow, the company’s senior vice president and general manager for Asia Pacific, said the Changshu factory, near Shanghai, was designed to expand Schulman’s geographic reach in China.

It currently has a facility in Dongguan, Guangdong Province, in southern China, where it has been investing in additional capacity for masterbatch and engineering plastics production.“We wanted to expand to the other side of China for a long time,” said Bristow, speaking at the Chinaplas 2016 trade fair in Shanghai.

The Changshu facility will open with 6.6 million pounds (three million kg) of annual concentrates capacity with three production lines, and is expected to grow to 15.4 million pounds (seven million kg) in four years, said Roger Zhao, managing director of A. Schulman’s Dongguan facility.

The Changshu plant is expected to add 22 million pounds (10 million kg) of masterbatch capacity in 2017 and 22 million pounds (10 million kg) of engineering plastics compounding capacity in 2018, Zhao said.

Schulman is also planning to beef up its research and development efforts in Asia, Bristow said, but some of the details have yet to be worked out.“We see Asia becoming a global technology driver” Bristow said. “We’re seeing some of the biggest converting machines coming into China, far in advance of anything else globally.”

The size of some of the consumer markets in China are driving much larger investments in factories making breathable films for products like babies’ nappies, requiring upgrades to some of its masterbatch materials for higher volume processing, he said.

“The machines going into China need to run bigger and faster,” he said. “We can’t cut and paste what we’re doing elsewhere.”

“In Europe they say ‘We’ve got products that can run as fast as you like, up to 200 metres a minute, while our customers in China need 400 metres a minute,” Bristow said.