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Robots on the march in China’s plastics industry

By Kent Miller | PLASTICS NEWS CHINA

Robotization is gaining steam in China's plastics industry, driven both by companies seeking refuge from rising costs, and, increasingly, by demands for more efficiency and quality control in their manufacturing.

Robots - the word was coined by 1920s Czech playwright Karel Capek from the Czech "robota," meaning "forced labor" - are becoming big business in a country historically known more for its low wages.

According to the Frankfurt-based International Federation of Robotics, China snapped up 68,600 robots in 2015, easily making it the world's leading robot market. In contrast, Europe bought 50,100 in the same year.

True to that trend, plastics processors in China are reporting much wider use of robots.

U.S. injection molder Evco Plastics, for example, has run its new plant in Dongguan as a "lights out" operation, with no workers tending machines. Its motivation: better quality and efficiency.

"We're not doing it necessarily to save labor," said President Dale Evans, in a recent interview at the Dongguan operation. "We're doing it to make more reliable parts, more precise parts."

While Evans said that its Chinese factory lags its U.S. operations in automation levels, the company said its experience with "lights out" manufacturing in Dongguan has rekindled interest stateside.

"We'd stopped doing lights-out in America some time ago," Evans said. "But when we started doing lights out in China, we took a renewed interest in doing it there again."

What's true of Godzilla is also true of automating: size matters.

At the Dongguan plant, Evco mostly makes small parts, which are easier to produce lights-out.

"More of the things you make lights out are little tiny things you can pick up and put in a box. The big stuff that you have to protect and do special packaging -- usually you have people working on them," Evans said.

Humbler forms of automation have been used throughout the plastics supply chain for decades, of course.

Today, walk the halls of a Chinese manufacturing trade fair and the brochures of even the tiniest mold-making shops in the gritty suburbs of Shenzhen proudly list their rosters of CNC machinery and automatic test-equipment, much of it imported.

One of China's larger and most international molding and mold making firms, TK Group Holdings Ltd., said it's adding more automation, and credits that for boosting its profit margins in an otherwise tough business climate last year.

Sales rose a modest 1.5 percent to HK$1.63 billion ($209 million), but gross profits jumped 9 percent company-wide because of both automation and a depreciating Chinese currency, TK told the Hong Kong stock market in a financial report last month.

In the plastics components side of its operations, it was more direct in linking rising profitability with robots: "The increase in gross profit margin was primarily attributable to enhanced efficiency resulting from increasing application of automation," the company said in its financial statement.

At U.S-based injection molder GW Plastics Inc., which also has a factory in Dongguan, the number one appeal of automation is product consistency, said Vice President of International Business Development Ben Bouchard. GW, based in Bethel, Vt., also has factories in the United States and Mexico.

"Labor is cheaper in Mexico or China relative to the U.S. but our customers expect product quality that is best served with automation solutions and check stations," Bouchard in an email interview. "We believe that custom part-specific automation development is an important part of what we provide to our customers."

Those firms are mirroring national goals China has set for itself.

Under its ambitious "Made in China 2025" industrial policy, China seeks to have 150 robots per 10,000 workers by 2025.

But it faces a steep climb: even though China is the world's largest market for industrial robots, the IFR said, it lags in density, with 49 robots per 10,000 workers. The worldwide average is 69 robots per 10,000 workers.

The leaders are South Korea, with 531 robots per 10,000 workers; Singapore, 395 per 10,000 workers; Japan, 305 per 10,000 workers; and Germany, 301 per 10,000 workers. The United States ranks eighth, with 176 robots per 10,000 workers.

IFR President Joe Gemma said the Chinese government has made it a priority to boost factory automation. The trade group estimated in a February report that by 2019, almost 40 percent of the global robot supply will be installed in China.

"One of the areas that's been growing pretty dramatically and has over the last several years is China," Gemma said, in a statement.

"Part of that is driven actually by the Chinese government," he said. "They have a 2025 initiative to support automation, to be a leader in automation globally. That trajectory will continue to grow."

That potential is bringing in global firms, even if parts of the Chinese market have some catching up to do.

"China is the biggest robot market, but especially in the software, it is not so advanced," said Allen Liang, vice president at Hunan Cothink Robotics Technology Company Ltd., based in Changsha.

Hunan Cothink, which formed in 2015, is the China distributor for Boston-based Rethink Robotics, which makes the Baxter and Sawyer lines of collaborative robots. The company counts Haier and Apple supplier Foxconn among its customers.

Liang was interviewed at the SPS Industrial Automation Fair in Guangzhou in early March, where he was trying to build a market for the company's higher-end robots.

Others investing in robots in China, however, are finding an unexpected benefit to automating in the world's workshop - it's cheaper.

"One of the key questions is what annual part volume justifies the cost of automation," said GW's Bouchard. "In China, we have found that automation is cheaper to implement and this means that it is often economical in China to add automation to projects that have annual volumes that are lower than what would be justified in the US."

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