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WPC equipment maker Qinchuan-Future mulling IPO in China

Author:未知 Source:  Updated:2014-09-30 16:09:13 Clicks:
CHICAGO (June 25, 3:39 p.m. ET) -- Strong growth in the wood-plastic composite market is prompting joint venture ChineseWPC equipment maker Qinchuan-Future Plastic Machinery Co. Ltd. to consider an initial public offering, a company

CHICAGO (June 25, 3:39 p.m. ET) -- Strong growth in the wood-plastic composite market is prompting joint venture ChineseWPC equipment maker Qinchuan-Future Plastic Machinery Co. Ltd. to consider an initial public offering, a company executive said in an interview at NPE.

The Baoji, Shaanxi province-based company is eyeing an IPO to raise between US$10 million and US$30 million for an expansion to handle increasing demand in both China's domestic wood-plastic composite market and in exports, said Wayne Song, director of Manalapan, N.J.-based Futuresoft Technologies Inc. (Booth W139051), one of the joint venture partners in QC Future.

The IPO would likely be in China's new Growth Enterprise Board stock market, the country's newly announced version of the American small-cap NASDAQ market.

QC Future makes extrusion lines for wood-plastic composite applications, including twin-screw models and turnkey systems. Its Chinese partner is publicly-traded equipment maker QC Machinery Development Co. Ltd.

Song, in a June 25 interview at FTI's booth, said the Chinese wood-plastic composite industry will have about 200,000 metric tons of production this year and could grow to more than 300,000 next year, fueled by the country's construction industry.

The industry also is being bolstered by government stimulus spending to shore up China's domestic economy amid the global downturn.

Song said the joint venture had about US$15 million in sales this year, and will likely hit US$18 million next year, and is seeing 40 percent growth in domestic sales and 15 percent growth in exports.

He said exports to developed markets like the United States are down, but he said the company has compensated by boosting exports to developing economies, including India, South Africa and Iran, with the latter business being handled by the company'sBeijing subsidiary.

He said the company had a booth at the PlastIndia trade fair in February in New Delhi and had very strong response.

Song said developing economies use Chinese wood-plastic composite equipment because the machinery is inexpensive, and because the raw materials, recycled plastic, are inexpensive but can give the appearance of wood products at a lower cost.

“Those markets are very price sensitive,” he said.

He said China's domestic wood-plastic composite market is starting to develop some very sophisticated products, including combination aluminum and composite window frames. He was displaying a window frame that he said his company had applied for more than 50 patents on in China.

He said wood-plastic composite applications inside homes in China can be more sophisticated than the U.S. market because American applications are focused on exterior applications.