Laizhou expanding in China with $1-million investment in new belt capacity

By Liz White, ERJ staff

Dusseldorf, Germany-Chinese rubber processor Laizhou Rubber and Plastic Factory is building a new plant at its Qingdao location which will nearly double its current capacity-especially in conveyor belting, where the firm is struggling to meet high domestic demand at present, said Yu Xianhong, export sales manager with the firm.

The parent, Yuelong Rubber and Plastic Group, is investing about $1 million in the new building, close to the firm's existing hose, belt and sheeting plant, Xianhong added.

Some 50 percent of the firm's products-which cover industrial hose, V-belts and conveyor belts and sheeting-are exported, to Europe,the US, South America, South-east Asia and Australia, said Xianhong, speaking to ERJ at the K 2004 exhibition in Dusseldorf, 21 Oct.

Laizhou will nearly double its current $10-million annual turnover in the next two to three years, Xianhong predicts, since domestic demand, especially for conveyor belting, is high and continues to rise to meet China's surging mining sector and its massive infrastructure growth.

Xianhong said one of her reasons for attending the K2004 show is to look at the rubber equipment available. China's rubber machinery sector is in need of development, and the firm finds it hard to get the sophisticated equipment it needs. Imported machinery is very expensive in China, she commented.

Raw materials prices in China have risen very rapidly this year, “its a big problem,” Xianhong said. Demand is very high in China, Xianhong commented, and rubber prices have risen 25 to 30 percent, she said, while steel prices have risen perhaps 60 or even 70 percent. Laizhou sources most of its rubber-SBR, polychloroprene and nitrile-locally, except for natural rubber and EPDM, and has not had any problems with shortages of supply.