KraussMaffei Purchase Another Sign That China Will Remain a Tough Competitor
11. January 2016
One hears talk lately about how China is supposedly losing its killer edge as a global exports powerhouse. It has an aging population, rising wages, slowing economic growth, a shift in emphasis toward internal consumption, and recent upsets in financial markets.
There’s truth in all of that, but something else is going on, too. It has been widely observed that China is shifting from its initial emphasis on high-volume commodity products toward higher-quality manufactured goods. It’s part of the state-sponsored “Made in China 2025” 10-year plan to upgrade China’s manufacturing to make it competitive with countries like Germany and withstand growing competition from even lower-cost, less developed countries in Asia.
Speaking of Germany, China National Chemical Corp., the largest chemicals group in that nation, announced today that it agreed to purchase the KraussMaffei Group of Germany for a little over a $1 billion (see Starting Up). KM CEO Frank Stieler linked the purchase to the higher-quality trend in China, stating that this is the sort of manufacturing to which KM machines are suited.
What this means, to my mind, is that North American plastics processors will have to keep hustling to keep ahead of Chinese competitors. Many processors profiled in this magazine’s “On-Site” reports have said they stay competitive through continuing investment in automation and the most advanced molding and auxiliary technologies. But topnotch machinery from Europe and the U.S. is selling well in China, and U.S. observers see growing competence in precision molding, multicomponent molding and other sophisticated technologies. One U.S. molder recently shipped an automated, multi-station assembly cell to its Chinese plant to make medical products (though for domestic use, not export). And despite numerous reports that some Chinese molds are not up to Western standards, molders and moldmakers here see a growing number of Chinese sources of high-quality tooling, often as a result of partnerships with, or ownership by, North America companies.
All of which says there’s no way out of the continuous-improvement race. Got to keep peddling, faster and faster.