PETpla.net Insider 10 / 2012

REGIONAL MARKET REPORTS 16 PET planet insider Vol. 13 No. 10/12 www.petpla.net KHS Corpoplast Trading (Shanghai) “Assembly of the Blomax in China will be a quantum leap for KHS Corpoplast. That is our expectation”. Geoffrey Chan at the KHS Corpoplast off ce in Shanghai We met: Geoffrey Chan, Managing Director Back in 2006 – at the time of our last foray into the Chinese market – Corpoplast, a company headquartered in Hamburg, and Simonazzi, with head offices in Parma, were jointly venturing into China. Insiders will recall the barely disguised rivalry between the two companies under the umbrella of Swiss holding company SIG . Now – or so the joke goes – rivalry is once again to the fore, but this time exclusively in the German language since both KHS and Corpoplast have in the meantime been taken over by Salzgitter and they are both now part of that company’s strategic network. SIG Corpoplast has metamorphosed into KHS Corpoplast. In China KHS and KHS Corpoplast go their separate ways, with each individually accountable for its own acquisition activities involving stand-alone machin- ery and selling jointly imported combined PET lines. We met Geoffrey Chan from KHS Corpoplast in Shang- hai to ask particularly about what has been happening over the past six years. How had KHS Corpoplast fared in this booming Chinese beverages market? Geoffrey Chan replied: “We have good reason to be satisfied with the role that we are playing today together with Sidel and Krones. The change from SIG to KHS was a logical move, it made old customers happy as well as gen- erating new ones. The next step – namely, assembling the block machine in China for the mineral water market, which contain Blomax + filler + capper – will be a quantum leap for KHS Coroplast. Or, at least, this is our expectation“. Population of KHS Corpoplast blowers in China Already in service in China there are – according to estimates from KHS Corpoplast – 1,000 imported blow moulding machines as well as an unquantifiable number of machines manufactured in China. In the last three boom years an average of 80 to 100 blow moulding machines from Europe have been imported into China. In 2006 there were 90 Corpoplast blow moulding machines installed in China. Today – March 2012 – there are 150 Corpoplast blow mouling machines, including twelve Blomax in blocks with KHS (CSD and water) as well as five Blomax in blocks with Shibuya/Japan (aseptic). They are high end machines with outputs of between 20,000bph and 72,000bph, with the majority averaging out at over 40,000bph. Although the trend is moving in the direction of block installations, KHS Corpoplast supply stand-alone blowers, frequently on an exchange basis with old installations in the line. (This, for example, is the case with Swire, who have exchanged eight blowers for Blomax systems). “Fillers, especially, are less subjected to wear and tear . Blowers are more often subject to critical productivity checks within a five-year cycle”. KHS Corpoplast deliver 90% to bottlers / brand owners and 10% to converters. Major customers  Swire (Coca Cola) (CSD)  CCCIL (Coca Cola China Industrial Ltd.) (CSD)  Ting Hsin (aseptic)  Nongfu Spring (water and aseptic)  President (aseptic)  Huiyuan (juices) Recent references  23 sets of Blomax 24S for aseptic bottling of RTD tea in cooperation with GEA Procomac, 48,000bph each, for Tingshin (indirect sale via GEA Procomac).  Three sets of Blomax 24C for aseptic bottling of peanut milk based product and RTD tea again together with GEA Procomac, for Yinlu Group (direct sale).  Five sets of Blomax 28S, aseptic bottling of RMTea and juice), 54,000bph each, block together with Shibuya, for Nongfu Spring.  Eight combi lines together with KHS, for CSD, 43,200 to 52,800 bph, for SWIRE and CCCIL (Coca Cola China Industrial Ltd.)  Seven more combi lines together with KHS, for water, 43,200 to 72,000bph, for Nongfu Spring. Geoffrey Chan continues: “We enjoy healthy growth, our expansion is prudent. We consider ourselves as one of the three big players in our field – currently holding 15% of the market, and with hopes eventually of a 30% share.“ The Chinese market is important for the principles in Hamburg. In 2011 orders from China amounted to approx. 30% of KHS Corpoplast sales overall. Strategies The optimistic expectations for the market stem from an increasing self-confidence brought about as a result of the stable relationships in partnership with KHS. There is another factor and that is due to the decision to assemble Blomax blow moulding machines + filler + capper locally in China and even- tually to manufacture components locally in the future. Funds of approx. US$ 7m are said to be available. The factory, situated in the vicinity of Shanghai, is poised to commence the assem-