MOSCOW (
MRC) -- Plastic pipe production in China grew 10% last year, to 12.1 million metric tons, fueled by increasing urbanization, expansion of rural drinking water systems and government spending on infrastructure, according to
Plasticsanews, citing statistics from a Chinese pipe industry group.
Production growth this year is likely to slow to between 5-10%, reflecting a general softening in the rapid growth rate of China’s economy, but the industry continues to have sizable long-term opportunities, said Wang Zhan Jie, secretary general of the Beijing-based China Plastics Piping Association.
But Wang and others at the event said the huge migration of Chinese residents to cities — estimated at 80 million people by 2020, or roughly the population of Germany — will continue to drive demand. Industry officials also noted demand coming from the country’s focus on developing its western regions, like the site of the conference, Yunnan province.
Plastic pipe production last year in China was only about 50% of installed capacity, according to CPPA figures. The trade association said in a report at the conference that that has led to fierce competition, with larger companies developing more quickly and smaller firms facing more trouble and bankruptcies.
Jiang Jia Cheng, chief executive of Wealpro Pipeline Industry Group Co. Ltd. in Yingkou, Liaoning province, said the market dynamics are encouraging consolidation. He said the industry’s 10% growth in production last year was average, but he said other firms, like his, have grown faster. For example, China’s largest pipe maker, publicly traded Lesso Group Holdings Ltd., reported that its production grew 17% last year, and revenue rose 20 percent.
A company’s success increasingly depends on its management, innovation, and quality and cost control, rather than simply tapping into growth, Jiang said.
CPPA figures say that while China’s pipe industry has between 6,000 and 10,000 plastic pipe manufacturing companies, the 400 members of its association account for about 70% of the country’s production. As MRC
wrote before, CPPA is working on new regulations for pipes, and regularly holds meeting with customer groups to try to address concerns and invites them to speak at its events, like the Chengdu conference.
MRC