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The increase in raw material prices has caused many companies to face significant challenges, but those that have responded effectively have remained relatively unaffected. In 2005, the plastics machinery industry in China experienced a difficult period due to factors such as macroeconomic control, rising oil prices, and a slump in the plastic product market. According to Dai Zhongyu, executive vice president of the China Plastics Machinery Industry Association, after years of rapid growth, the plastics machinery market was beginning to decline, signaling a new round of restructuring across the industry.
According to official data, from January to October 2005, the plastics machinery industry achieved sales revenue of 14.6 billion yuan, reflecting a 22.56% year-on-year increase. However, the profit margin dropped by 1.37%, indicating pressure on profitability. Meanwhile, export delivery value reached 2.374 billion yuan, up 20.5% compared to the previous year. With oil prices expected to remain high, energy-efficient, low-consumption, and high-value equipment are becoming more attractive to users. Dai Zhongkai urged manufacturers to focus on technological upgrades and product innovation to better withstand the challenges ahead.
Chen Hao, Marketing Development Manager at Guangdong Jinming Plastics Equipment Co., Ltd., noted that rising raw material costs have significantly reduced customer profits. As a result, customers are now more focused on material conservation, energy efficiency, and production speed—factors that make some companies willing to invest in expensive imported equipment. Jinming, known for its tech-driven approach, continues to invest in improving the energy efficiency, automation, and technical content of its machines.
Huang Buming, general manager of Guangdong Kenli Machinery Co., Ltd., analyzed the reasons behind the market downturn. He pointed out that the sharp rise in plastic raw material prices, combined with decreased demand in the injection molding sector and stricter international trade policies, has had a major impact. Additionally, energy shortages in China have affected operations, especially in coastal regions where many plastics manufacturers face underemployment. Despite these challenges, Kenli’s precision injection molding machines, used in high-value products, have performed well in a tough market.
Shi Yonghong, director of Shaanxi Qinchuan Plastic Machinery Plant, noted that while the overall market has declined, their company still saw a slight increase. This is due to their focus on quality, technology, and customer service rather than price competition. Their hollow blow molding machines are lighter and more efficient than similar domestic models, saving about 5% in materials. However, they also faced pressure from intense competition and rising raw material costs, which have increased production expenses and squeezed profits.
Qinde Group’s Qian Qinxian mentioned that rising raw material prices affected turnover, but through improved sales strategies, the company’s business situation began to improve. Industry insiders also noted that the consolidation of the plastics machinery sector is accelerating, with many small, low-tech manufacturers struggling or closing down.
Experts believe that this market shake-up could lead to a healthier industry structure. Many small firms lack R&D capabilities and often compete by lowering prices, compromising product quality and reliability. This not only harms users but also affects reputable companies that prioritize quality and performance.
Dai Zhongkai emphasized the importance of focusing on product quality and continuous technological upgrades. Precision and high-precision injection molding machines are emerging as key areas of growth. However, he warned against blind investment and urged companies to be strategic.
Looking ahead, there are signs of recovery in 2006. Although oil prices remain high, the expansion of large chemical companies and new projects may support continued growth. However, the second half of the year remains uncertain.
Industry leaders like Zhang Qizhi believe that only strong, well-managed companies with high-quality products will survive. Exporting and improving product competitiveness are crucial for long-term success. Chen Hao highlighted that his company already exports to several countries, and plans to boost exports by 50% in 2006.
Huang Buming sees the current situation as an opportunity. With most domestic machines being low-end and high-precision models largely imported, there's room for growth if companies can enhance cost-effectiveness and marketing. The hollow machine market is expected to grow between 5% and 10% in 2006.
Qinchuan Plastic Machinery Factory is focusing on high-end markets, avoiding price wars, and continuously innovating. New models, including a 200L double hollow machine and a 30L high-efficiency model, are set to launch in 2006. Overall, 2006 remains a challenging year for the plastics machinery industry.
October 06, 2025