Trinseo banks on quality for sustained growth in China
New York-listed material solutions provider Trinseo is planning to ramp up production and sales in China through a new Acrylonitrile Butadiene Styrene (ABS) plant in Zhangjiagang, Jiangsu province and leveraging the growth opportunities from China’s boost in consumption.
Tim Stedman, senior vicepresident and head of plastics and feedstock division, Trinseo, said that the company hopes to grow in China in line with Made in China 2025 by providing materials solutions to Chinese manufacturers shifting to a quality-oriented growth strategy.
The US-based firm’s products include plastics, latex binders and synthetic rubber, which are widely used in automotive, consumer electronics, appliances, medical devices, lighting, electrical equipment, carpets, paper and board, building and construction and tires. ABS is used in piping, automotive components, appliance components, components of business machines, telephones and electrical and electronic equipment.
In 2016, Trinseo posted sales of $3.7 billion from its 16 manufacturing sites around the world. The Asia market, mainly China, contributed about 25 percent to its global revenue.
Trinseo invested some $40 million into the Zhangjiagang ABS, which started operation last month. Products from the plant will be sold in China and to markets in Southeast Asia and Europe.
“Our investment in Zhangjiagang shares the same value with Made in China 2025, which enables manufacturers to produce quality products with advanced technologies and materials,” he said.
According to Stedman, the automobile sector is one of the biggest users of its products. Low-odor materials with good coloring and processing properties can be widely applied in interiors of cars and are meeting increasing demands for customization and higher standards for experiences, he said.
Plastic with glass fiber materials will replace more metal products in the manufacturing of automobile in the near future, said Stedman.
It is expected that global automotive exteriors materials market will be worth some 19.21 billion yuan ($2.9 billion) by 2025, with compound annual growth rate of 7 percent, according to a research note by Grand View Research Inc.
Steel is expected to see rising competition from plastics and carbon composite materials as the material of choice for exterior parts, the report said.
Globally, Trinseo, alongside with Magna International Inc, Toyota Boshoku Corporation, Kirchhoff Automotive GmbH, DURA Automotive Systems LLC and Plastic Omnium SA are major players in the market.
In China, consumers’ quest for higher-quality, higher safety standards and customized products may push the overall growth of materials to high single digits or even double digits in the next five years, according to a research note by Guosen Securities.