Plastic Products Develop Steadily
By Liu Junke

Output increased rapidly

The average annual growth rate of the plastic product sector has
maintained at more than 10% in recent years. According to the
statistics made by the National Bureau of Statistics of China,
the output of plastic products in China was 21.9854 million tons
in 2005, an increase of 19.10% over 2004. The industrial total
output value (current price) was RMB501.138 billion, an increase
of 31.77%. The product sales revenue was RMB484.691 billion, an
increase of 27.46%. The total profit was RMB20.632 billion, an
increase of 30.16%. Despite the narrow profit margin of plastic
products caused by the price rise of raw materials in recent
years, thanks to the stimulation from the market demand, the
production has still maintained a rising trend.

Export amount was much higher than the import amount

The export of plastic products in China has maintained a rapid
growth. According to customs statistics, the export amount of
plastic products in China was 12.2849 million tons in 2005, an
increase of 13.97% over 2004. The export value was US$16.604
billion, an increase of 30%. The export amount of plastic pipes
in 2005 increased rapidly and was 55.68% higher over 2004. The
export value of plastic pipes rose by 76.70%. The export amount
of plastic boards and sheets also had a drastic increase of
40.10%. The import amount of plastic products in China was 1.7389
million tons in 2005, a drop of 2.35% from 2004. The import value
was US$8.290 billion, an increase of 17.26%. The import amount
of plastic flooring materials and pipes presented a rising trend
whereas the import amount of other plastic products had a
reduction compared with 2004.
   The export amount has increased constantly and is much higher
than the import amount. The favorable balance was US$8.314
billion in 2005. Plastic products for export are mostly
varieties with low added value or varieties entrusted by foreign
companies for processing. Compared with similar products for
import, there is a considerable gap in technology and process
design.

The variety has increased remarkably and needs in various
sectors can be satisfied

    (1) Packing material is the sector with the most rapid
development
The demand of packing materials in China already reached more
than 7.0 million tons in 2005. Packing materials have become
plastic products with the most rapid development. The emergence
of new products and new methods has greatly improved the packing
effect. For example, China is able to produce BOPP (bi-oriented
polypropylene), BOPET (bi-oriented polyester), BOPS
(bi-oriented polystyrene), CPP (chlorinated polypropylene),
heat-shrinkable films and other composite films. Beverage
bottles and hollow containers (including containers for special
uses) with various specifications are already very popular.
   China has introduced 152 BOPP production lines with a total
capacity of 1.789 million t/a. 73 production lines are from
Brueckner of Germany, accounting for 48% of the total. 45
production lines are from Mitsubishi Heavy Industries and 16
production lines are from DMT of France. Production lines
introduced from these 3 companies account for 90% of the total.
It is therefore a hard task to develop new products and seek new
markets.
    In terms of bi-oriented films, it is imperative to readjust
the product portfolio and lay the focus of product development
on special films. For example, Jiangyin Yabao New Materials Co.,
Ltd. used its 5-ply co-extrusion BOPP production line to start
the development of super thin pearly luster film, synthetic
paper and label film in May 2004. The company put pearly luster
film below 24mm and synthetic paper series of 40mm, 70mm and 90mm
in the market in November 2004. Quality indexes of label film
of 34mm and 38mm such as density, mechanical property and optical
property have reached the advanced level.

    (2) Plastic construction materials have a bright
development prospect
The application proportion of plastic pipes and profiles in
construction pipes and doors/windows have already reached 30%
and 15% respectively. Their demand will still increase
drastically in future. Other plastic products such as decoration
materials, flooring leather, flooring blocks and waterproof
coiled materials will also become indispensable varieties in
construction materials.
   Despite the price rise of raw materials and the fierce
competition in market, the plastic pipe sector in China still
managed to maintain a stable development in 2005. According to
incomplete statistics, the processing capacity of various
plastic pipes was close to 4.0 million t/a and the output was
around 2.0 million tons. There were around 70 producers with a
capacity of over 10 thousand t/a and the capacity in 20 of them
already reached or approached 100 thousand t/a.
   With the further increase in the number of plastic pipe
producers, market competition has become fiercer. Some
producers have realized that they must improve product quality,
enhance market competitive edge and create famous brands.
Several dozen local famous brand products have already been
developed in China. Many plastic pipe and fitting producers
started to use international standards and their technical level
upgraded greatly.
   The capacity of plastic profiles in China was around 3.5
million t/a in 2005, the output was around 1.6 million tons and
the export amount was 60 thousand tons. Besides, equipment,
molds and matching parts have also been exported to overseas
markets.

    (3) Plastic products used in industrial sectors have
increased drastically in variety and amount
Insulation materials and sheathing materials for electric
cables and optical cables have shifted from rubber, lead and
paper to all-plastic materials. The consumption of plastic
materials in household electric appliances such as computers,
washing machines, refrigerators, electric fans, air
conditioners, vacuum cleaners and television sets has increased
drastically. An important indicator for the development of the
automobile industry is the use of great quantities of plastics
in the manufacturing process. The rapid capacity expansion of
various engineering plastics in China has offered a firm support
to the development of the automobile industry.

The production distribution is relatively concentrated

In terms of the regional distribution in the output of plastic
products, Guangdong, Zhejiang and Jiangsu provinces hold a
leading position in China and the capacity in these three
provinces accounts for 56% of the national total. The production
distribution of plastic products is relatively concentrated in
China and has a distinctive regional feature. Major producing
regions are basically distributed in southeastern coastal
areas.


Table 1  Major Plastic Products in China in 2005            
(thousand tons)
Product                                                              &nb