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JULY 2005

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PLASTICS INDUSTRY REVIEW



China First

    Certainly the range of Chinese plastics projects is wide and deep. So is the scale, including a forthcoming plant from
mid-sized Missouri-based plastics company Spartech; a new 87,460-sq.-ft. (8,125-sq.-m.), 110-employee plastic closures plant in Hangzhou, south of Shanghai, from Alcoa; and a nylon plant to support automotive airbag production from Japanese textile firm Toyobo Ltd. Until now, Toyobo had served its Chinese automotive customers from a plant in Thailand.
      Scope is also expanding. In Shenzhen's Pinghu logistics park, five Hong Kong-based financial firms are making a five-year, $314-million investment in what they call the largest global trade center of raw materials for manufacturing.
      China South International Industrial Materials City will have an eventual floor space of 23.7 million sq. ft. (2.2 million sq. m.), with just under a quarter of that space planned for the first phase. The giant complex will handle raw materials for industries ranging from garment, leather, metal, chemical and plastics to electronics, printing, paper and packing.
      Westmont, Ill.-based United Plastics Group (UPG) in 2004 opened a tool-making and engineering center in Suzhou, just down the road from its manufacturing plant and 50 minutes from Shanghai airport. The facility was expected to employ as many as 20 full-time tool makers by the end of 2004 in the design and manufacture of low-cost, high-quality injection molds.
      UPG's investment in Suzhou climbed again in June 2005, when the company announced it would pour $10 million into a full-service custom manufacturing facility in the free trade zone of the Suzhou Industrial Park. The new plant will open by the end of 2005.
      Richard Harris, UPG COO, said the new facility would "encompass over 100,000 square feet [9,290 sq. m.] of space, housing a broad range of injection molding machines. In addition, the new manufacturing location will include space dedicated to value-added assembly and mold maintenance. We chose the free trade zone ... as it is a specially designated zone for international trade operations. This is excellent news for our global customers, as goods imported from outside of China, along with exported products are exempt from value-added taxes and duties.
      "As we continue to pursue our mission of being a low cost provider," he continued, "the free trade zone allows UPG to provide our global customers the tax advantages of the trade zone while continuing to service the growing domestic market from our current Suzhou facility."
      As with the first two facilities, the plant will be incorporated as a Wholly Owned Foreign Enterprise (WOFE)."UPG Suzhou (EPZ) is the next step in our strategic plan to expand UPG's footprint in Asia," said Tom Opielowski, UPG's vice president of operations, Asia. "We have included a broad range of technical and engineering capabilities such as two-shot molding, a Class 100,000 clean-room as well as our best-in-class project engineering capabilities, all meeting ISO 9002 and TS 16949 quality specifications."
      The Chinese expansion comes in the wake of the company's closure of its El Paso, Texas, plant, effective June 30, 2005. And it's not the last UPG move in China by any means.
     
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