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January 29, 2013
Recycler MBA Polymers said its production site at Guangzhou, China, has been recognized by the Guangdong province as an outstanding "clean plant" in the region in 2012.
The plant, located in the Nansha Economic Development Zone District, is within 45 minutes of most major global manufacturers of consumer electronic and IT equipment. The plant produces post-consumer resins from waste electrical and electronic equipment for reuse in a multitude of new plastics applications, including those that require UL, RoHS and REACH certifications.
The plant started the cleaner production audit process in November 2010. After a panel of experts investigated the site for evaluation, 31 cleaner production improvements were completed, including 25 low-cost and six high-cost schemes.
The company currently operates recycling facilities in the United States, United Kingdom, Austria and China. It also sells post-consumer recycled plastics to many countries around the world.
The Guangzhou plant, MBA Plastics Co. Ltd. is a Sino-U.S. joint venture between majority owner MBA Polymers and its partner Guangzhou Iron & Steel Enterprises Group Co. Ltd.
December 6, 2012
China's PVC maker Sichuan Jinlu Group is selling land and other equities to avoid another year in the red, which could lead to a downgrade of its shares on the Shenzhen Stock Exchange.
The company announced this week that it expects to gain 90 million yuan from transferring the use rights of five parcels of land. It also expects 80 million yuan from selling shares of another company.
Jinlu reported a loss of 88.9 million yuan for the first three quarters of 2012, following a 116 million yuan loss in fiscal year 2011. If the company fails to turn a positive net profit this year, its shares will be given a "special treatment" status, a Chinese system for listed companies with abnormal financial conditions.
A ST stock that fails to stay profitable will receive a delisting warning after two consecutive years of loss.
Given the severe PVC overcapacity in China and a less-than-robust economic forecast, Jinlu no doubt faces real challenges. Selling equities is not a sustainable measure for its financial health.
Early this year, Jinlu received a 10 million yuan government subsidy to support its joint R&D project with the Chinese Academy of Science on graphene materials -- one-atom-thick sheets of carbon. But the likelihood of a commercial success in the near future is rather slim.
ABS resin pricing in the Asian market has dropped to its lowest point since early July, thanks to the distressed global economy, according to Japan's business media Nikkei. Demand from the auto and appliance industry is obviously slowing down, the report said.
China is at the center of the slowdown, the report said. The fall season usually generates more spot purchases to prepare for the winter holidays, but this year almost didn't see large-scale purchases, Japanese ABS supplier Techno Polymer was quoted as saying.
The current spot price for ABS is around $1,870 per metric ton in East Asia, the report said. Feedstock pricing is not expected to trigger any major change in ABS pricing, as acrylonitrile prices are declining and styrene prices remain high - offsetting each other.
November 30, 2012
Of all the actions a business can take in response to antidumping tariffs, undervaluing the imported goods isn't a smart, or legal, move. A Chinese man has been sentenced to 16 months in prison followed by one year of supervised release by a U.S. District Judge for falsely undervaluing imported plastic bags.
Jin Qing Huang, a 57 year old citizen of the People's Republic of China, admitted that he underpaid the legally required duty of imports by an amount between $5,000 and $10,000, according to a release from the U.S. Attorney's office for the district of Maryland.
From 2006 to 2010, Huang controlled Woncity Inc. and other corporations that imported plastic bags and other restaurant supplies from China, with warehouses in Washington, D.C. and Baltimore.
Huang claimed only $52,494 for $82,196 worth of merchandise he imported in 2007 and in 2008 claimed $10,073 for $30,118 worth of imports.
The U.S. levies a 77.57 percent antidumping duty on plastics bags imported from China.
November 29, 2012
This week Samsung admitted illegal labor practices at its Chinese suppliers, joining Apple as another global brand that's plagued by labor issues in China. Meanwhile, Foxconn is reported to be looking to open factories in the U.S. Also related, Fujitsu said its highly automated laptop factory in Shimane, Japan only needs 16 workers at each assembly line vs. 120 at its Chinese supplier. So, where is electronics manufacturing going?
Let's first take a deeper look at Foxconn's US expansion plans. I find it ironic that the Digitimes report said: "Since the manufacturing of Apple's products is rather complicated, the market watchers expect the rumored plants [in the U.S.] to focus on LCD TV production, which can be highly automated and easier."
In other words, the U.S. can take "easier and highly automated" manufacturing, but not so much the "rather complicated" production of Apple products that's currently being handled by Chinese workers in less-than-ideal working conditions. If that's the case, I start to question whether the re-shoring trend that's supposed to bring jobs back to the U.S. is creating as many jobs as people expect.
But even for Foxconn's plants in China, headcount is bound to decrease as the company introduces automation equipment into production. The company pledged last year to supplement its 1.2 million workers in China with 1 million robots within three years. Recent media reports show that Foxconn has built and installed the first batch of 10,000 of its own robots, nicknamed Foxbots, at a fairly low cost ($20,000 to 25,000 per unit). By the end of the year, another 20,000 Foxbots will be added to Foxconns factories.
These simple, low-cost robots aren't sophisticated enough to assemble an iPhone5, for now. But Foxconn is continuing to seek to make high-end robots that can handle more precise work cost-effectively. Automation equipment will not completely eliminate the need for human labor, but it will reduce the amount of required human input drastically.
In the end, maybe the location of manufacturing won't even matter much anymore, because robots will handle most of the work. Labor cost won't be a crucial part of the cost equation. Then would China retain any advantage to continue to serve as the world's factory?
November 19, 2012
A plasticizer-related news report on Nov. 19 cost China's booming liquor companies 33 billion yuan in stock market value at one point and is now drawing public scrutiny onto the safety of plasticizers found in liquor products.
China's business media 21cnh.com unveiled a third-party lab report that shows excessive amounts of DBP in a liquor product, about 260 percent higher than the recommended threshold by China's food regulations (0.3 mg/kg). The other two tested chemicals, DEHP and DINP, are within the regulatory thresholds.
In response, the liquor maker Jiugui Liquor Co. Ltd. decided to suspend the trading of its stocks and started a crisis public relations campaign.
Beijing-based China Alcoholic Drinks Association responded later during the day with an official statement on its website. The group claimed that it's common to find small amounts of plasticizers in liquor products sold in China, and its survey actually found higher amounts in higher-end brands than lower-end products.
CADA said the plasticizers primarily come from plastic barrels, plastic tubing and plastic sheets used in the production process as well as from the plastic inner lids and packaging (bags, bottles and kegs) of the finished products.
Latex tubes, used by all liquor makers to connect with pumps, contribute the largest amount of plasticizers that leak into liquor, the group said. Every 10 meters of such tube can add 01.mg/kg of plasticizers to the liquor.
Other plastic products and equipment involved in liquor production vary from case to case, it added.
It's worth noting that the group pointed out the amount of plasticizers in liquor products packaged in plastic bags and plastic bottles will rise over time.
Nevertheless, the CADA refuted media reports of health risks associated with the ingestion of plasticizers from liquor. The industry has been using plastics products and equipment in the liquor-making process since the 1970s, it said, and there has not been any case of sickness caused by plasticizers in liquor.
However, the statement suggests the industry ban the use of plastic products during the production, storage and distribution/sale of liquor products, "as preventive measures."
The group plans to establish official thresholds, specific for the liquor industry, after safety evaluations are completed by the public health department.
November 7, 2012
The 2013 Chinaplas will take place May 20-23 in Guangzhou. Instead of closing down around noon on the fourth day, the trade fair will run through 5pm on the last day, making it a four day event. The change may be an in-time effort to help increase traffic, as the recent Canton Fair - the world's largest trade show - recorded a disappointing decline in both attendance and transaction volume.
Hong Kong-based Adsale Exhibition Services Ltd., organizer of the annual show, today sent out a brief tweet on Chinese social media Sina Weibo, announcing to extend the show to four days. "So that attendees would have more time to walk the show," it said.
With the new schedule, Adsale estimates the scale of the show will continue to grow this year, despite the slowdown of the Chinese economy and the tough export environment. The company posted this graph on the event website. Click to open the full size image in a new window.
October 31, 2012
Plastics News China attended a media workshop Monday in Shanghai, hosted by Bayer MaterialScience to present the manufacturer's case and reshape the perception of BPA among consumers and the media. Representatives from Chinese environmental and plastics media at the event were vocal about their skepticism.
Dr. Gisela Stropp, head of BMS Toxicology Institute, gave a detailed look at the history of the dispute over BPA usage. She acknowledged that BPA shows weak hormone-like activity in the body, but clarified that this is only through high doses that humans would not be exposed to under normal circumstances. She criticized media coverage of experimental studies, which she said did not accurately take into consideration the weight of evidence. She discredited studies that she said could not be confirmed or replicated. Finally she presented US Food and Drug Administration research that finds that after BPA is ingested into the body, it is metabolized and excreted within a few hours.
Holly Lei, vice president-polycarbonates at BMS China, presented on the multitude of uses of polycarbonates containing BPA.
Chinese reporters pressed the two presenters on details of usage and safety of products containing BPA. They questioned why BPA remains a banned chemical in baby products in the EU, US, and China. They openly questioned whether BMS could be trusted to be impartial about a chemical it manufactures.
Lei and Stropp confirmed that the workshop is part of a concerted effort by BMS to counter the negative image that BPA has gained among consumers. Annette Wiedenbach, global head of communications, polycarbonates, said the company has been attempting to enter the conversation about BPA and bring the focus to changing the public's perception of the chemical.
Bayer developed polycarbonate in 1957 and is one of the world's largest producers of the material.
October 26, 2012
China's new plastics recycling regulations that took effects at the beginning of this month specifically mentioned the ban of any import of unwashed, post-consumer plastics scrap, which a few readers have called me to ask about. In fact the ban has existed for years. The government was simply reiterating it, because it hasn't been strictly enforced. But is it even enforceable?
According to the "Solid Waste Import Regulations" (GB16487.12), China started in 2005 to require imported post-consumer plastic containers to be "granulated and washed to the extent that there is no obvious odor or stains." However, it didn't give details on how the scrap is supposed to washed and how an "obvious odor and stain" are defined.
The requirement failed to provide quantitative methods for evaluating scrap materials. It was interpreted and enforced in different ways by various interest groups, Jason Wang from the China Scrap Plastics Association told me.
The Plastics Recycling Committee of China Plastics Processing Industry Association echoed that, saying that even the most fundamental standards are unclear and debatable, making the regulation impractical to enforce.
"That's why the Ministry of Environmental Protection is taking another look at the issue and asking the industry for input," said Xie Fang from the Shenzhen-based group.
Some readers also asked me about exporting electronic waste to China - whether it is subject to the same regulations for the import of plastic bottles and bags, for instance. It is difficult to find a definitive, explicit answer from the government regulations, but both CSPA and CPPIA-PRC told me electronic waste has been treated like any other type of plastics scrap. But both groups also pointed out that the current policy - washed, no odor and stain - are insufficient to ensure the safety of electronic waste import and recycling.
Waste electrical and electronic equipment (WEEE) contains large quantities of ABS and HIPS, Xie said. For large plastic housings, it's easy to take them off and wash them clean. But for parts that have heavy metal or chemical residues, simply washing is not an effective way to clean away the harmful substances.
September 24, 2012
Last night's riot at Foxconn's plant in China's central city Taiyuan makes me wonder whether the supposedly more affordable inland regions will be able to keep manufacturing from leaving the country. These regions have been thought to be good alternatives to China's traditional industrial clusters on the east coast.
The riot started around 10 p.m. Sunday night, triggered by plant security guards allegedly hitting a worker, media reports said. A Reuters report said more than 2,000 people were involved in the violence and at least 40 people were injured. A Xinhua News Agency report, on the other hand, said only a dozen people were injured. Foxconn shut down the factory on Monday.
The incident has quickly caught attention from global media, partially because the Taiyuan factory reportedly makes components and does some assembly for the iPhone 5. But it also reflects on the serious challenges China faces on the labor front.
As labor costs rose rapidly on China's east coast over the past few years, Foxconn didn't leave the Chinese mainland for lower-cost countries, but instead built new factories in the midwest regions, where wages are significantly lower.
But whether that strategy can retain its competitiveness is open to debate. Management seems to be a challenge. A small riot broke out in June at Foxconn plant in the southwest city of Chengdu.
Recruitment also appears be a difficult task, as Chinese media reported that Henan provincial government allocated large amounts of subsidies to help Foxconn's Zhengzhou campus recruit. A report from China's CNR said local authorities in Jiangsu province pressured local college students to work as interns at a Foxconn factory there.
Foxconn has announced ambitious plans to automate its production process, adding armies of industrial robots to its factories. But its order-based operation model heavily replies on massive groups of human labor that can work very intensely for a short period of time to fulfill surging demand for products such as the iPhone 5.The Zhengzhou campus, for example, needed to find 50,000 new workers this month to reach a daily production capacity of 200,000 units of iPhone 5. It's more economical than investing in automation equipment just for the Apple order.
Last month, Hong Kong-listed Foxconn International Holdings Ltd. posted its worst-ever first-half net loss of $226.07 million. FIH is a contract cellphone manufacturer but it does not make Apple products. Its parent, Foxconn Technology Group, assembles iPhones and iPads.
Since the launch of our Plastics News China eWeekly newsletter and related Web site in June 2005, I've been receiving e-mails and phone calls from readers who would like to discuss news events and industry trends with me. This blog is to provide a platform to facilitate such communication. I invite you to come here often, read about the latest happenings and discuss them with me as well as with industry friends all across the globe. I welcome your comments and opinions.
Nina Ying Sun
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