Hong Kong molders and mold makers target the mainland market

As the European and American countries that are traditional export markets have not shown significant improvement, mold makers and custom injection molders in Hong Kong are increasingly turning to the Chinese mainland market. Take Yada Mould Design & Manufacturing Co., Ltd. as an example. At present, the proportion of domestic business in China has increased from 30% to 20%, from 30% to 50%. Although the domestic proportion has increased, the total sales volume has remained at 2500 during the economic crisis. Millions of dollars.
Simon Cheung, Vice President of Yada Mold Company, said: “In the past, we have focused more on the export market, but now we have shifted our focus to the domestic market.” The company has several mold and injection molding plants in southern China adjacent to Hong Kong and employs 800 people. .

Alfred Au, vice president of the Hong Kong Mould and Die Association, said that shifting the focus to the Chinese market is a trend shared by many Hong Kong companies.

He said that the areas that Hong Kong companies are targeting include the Chinese auto market and Japanese automakers' factories in Guangzhou. These factories are increasingly seeking suppliers outside the traditional Japanese manufacturing base in order to achieve cost reduction.

He said that although the plastics molding and mold making industry in Hong Kong has improved since 2009, the overseas market is still not in a healthy orbit and its economic outlook remains uncertain.

Au said: "Although the economy is recovering, the speed is still not fast enough and it still fluctuates. We often hear people say that the amount of business is fluctuating and unstable."

Au believes that Hong Kong's plastics companies are either bigger or stronger, or specialize in finesse. He and other industry managers were interviewed at the International Mold Application and Design and Manufacturing Technology Exhibition (Asianmold) held in Guangzhou from September 15th to 17th.

Au said that Hong Kong companies hope to show Asiamold their capabilities in more sophisticated areas such as micro-molding and complex mold manufacturing. The Hong Kong Mould and Die Association displayed more first-class technological achievements of local companies at the show.

However, Hong Kong companies must pay attention to developing business in the Chinese market is not a matter of course.

Although there are thousands of Hong Kong-owned factories in the Mainland, Hong Kong business executives say that the Mainland and Hong Kong have a very different business culture. Moreover, the mainland market is very much concerned with price competitiveness. At this point, Hong Kong companies are often no match for mainland competitors.

As a result, many Hong Kong companies have taken a different path and have not chosen to supply Chinese domestic brands. Their main customers are multinational companies that are trying to establish business in China.

Cheong of Yada Tooling said that his company believes that Chinese brands are less willing to pay for quality, which is a challenge for Hong Kong companies that have traditionally supplied quality Western markets.

He said that first-class quality is the advantage of Yada, for example, the company has recently become one of the first Chinese mold manufacturers to obtain strict German automotive manufacturing standard certification.

There have been some Hong Kong plastic molders, such as Elite Enterprises Holdings Limited, which have announced plans to build factories in the Chinese mainland and specialize in supplying local markets.

However, Au said that he does not think that most other Hong Kong companies will follow suit because these companies are in a volatile market and do not have sufficient financial strength to bear this risk.

Au pointed out that in recent years, some smaller Hong Kong mold makers have closed down or merged with their peers.

However, Hong Kong companies are still full of interest in the Chinese mainland market.

AmenFong, business development manager of Nypro Ltd., said that although the company has more than 85% of its business from the export market, they still value the Chinese market.

Fong said that the company is a joint venture between Nypro Inc., a leading plastic molder in the United States, and a company in Hong Kong, and hopes to use the Asiamold platform to strengthen its position in the local market. In addition, they foresee that Chinese domestic brands will increasingly improve. The requirements of production quality, while they also have sufficient financial strength as a support.

He said: "These companies are our goal."

Fong said that the company’s current business volume is still below the level before the economic crisis, but it is expected to return to pre-crisis levels by next year.

He said that as one of the means to cut costs, the company is considering doubling the size of its Shenzhen mold manufacturing plant and transferring part of its production in the Hong Kong factory. The Hong Kong plant will focus more on research, product development and technological content in the future. High project.

Nepro Hong Kong Co., Ltd. has mold manufacturing plants in Shenzhen, Suzhou and Tianjin.

Other Asian companies have also seen a growing demand in the Chinese mainland market.

LeongYokeMing, general manager of Singapore ExpressTechCo.Ltd., said: “At present, we have not yet taken a unified action in the [China] domestic market, but the local business is growing.” The 150-person company is built in Singapore, Jiangsu, China and Vietnam. There is a production plant.

He said: "We have found that the quality requirements of this market are increasing, but local mold makers often cannot meet this requirement."

However, not all Hong Kong mold makers are targeting the Chinese domestic market.

For example, Friends Mold Co., Ltd. is far from this market because of the fierce price war on the mainland market, its business operations director AndyS.K.Chu said.

He said that Friends Mold Co., Ltd. mainly supplies the toy industry, and supplies about 1,500 molds for Mattel Toys each year, accounting for about 15% of its total mold usage.

But the company is trying to diversify its business and try to open up new markets such as medical and precision electronics.

Chu said that the growth of such new business - which now accounts for about 25% of its total sales - has caused the company's sales in 2010 to hit a record high, exceeding the level of sales before the economic crisis.

Chu said that the company’s U.S. customer orders have increased because U.S. companies are under greater pressure for cost reduction and want to purchase more Asian-made molds to reduce costs.