China's Injection Molding Industry keeping up with the pace growth

06-Mar-07

Over the past 25 years, China has gradually been moving from a centrally planned economy to a market orientated system which has opened the economy to increased private ownership and foreign investments. China now dominates the plastics industry in Asia with a consumption of over 38 million tons of polymers in 2006 putting it on a par with the EU and larger than the USA. Injection moulding is one of its most dynamic sectors, accounting for 30% of this polymer demand and enjoying growth rates of about 8% pa. Major end use sectors for injection moulding goods include electrical appliances, computer and IT housings and components, mobile phones, CDs/DVDs, household goods, consumer products and automotive components. Future growth will be driven both by the manufacturing of consumer goods for export and by growing local demand for packaging, building products, cars and other consumer durables. Injection moulding accounts for about 70% of the total number of plastics processors in China but this is a highly fragmented industry including a large number of small private and state owned companies. It is also a feature of the Chinese processing industry that a number of the larger groups are involved in a wide variety of plastics processing activities. China has also benefited from huge investments by overseas processors looking to exploit China's lower wage costs and improve profit, but also to participate in China's economic growth. Production has moved from within Asia, North America and particularly from Europe where labour costs are high. The geographic distribution of plastics processing and more specifically of the injection moulding industry is very uneven with most companies located in the coastal regions of the South East, mainly in the Guangdong, Zhejiangs, Jiangsu and Shandong provinces. This information is based on a new database of injection moulders in China, encompassing over 1,500 companies in China by leading consultants to the plastics processing industry, Applied Market Information.