Automotive plastics are the fastest growing application area. China's car ownership has doubled in the past decade, from 37 cars per 1,000 people in 2007 to 81 cars per 1,000 people this year. The demand for plastics is driving the growth of demand for plastic production equipment. The plastics industry is still a highly fragmented industry, with the top ten manufacturers accounting for only 40% of the total market.
Foreign companies dominate the world in high-end areas. A company defines high-end areas as: plastic machinery optimized for engineering plastics and fast-developing medical equipment. Domestic equipment is still the king of the low-end field, and its iconic application is the production of cheap electrical appliances.
But now, all companies are beginning to focus on the mid-range market, targeting overseas buyers and China's growing middle class's demand for high-quality home appliances and automobiles, as well as China's increasingly aging demand for medical supplies.
According to the report, despite rising labor costs and stricter environmental regulations, China's plastic equipment industry is still competitive with its economies of scale, industry clusters (for example, 47% of domestic plastic production equipment in China comes from Zhejiang Province), and complete infrastructure.
In fact, the Chinese government's investment in infrastructure is driving the development of the inland market. Therefore, it is recommended to enter the central and western regions. Although coastal locations such as Zhejiang, Guangdong, and Shandong still dominate the plastic equipment industry, Henan Province is steadily surpassing all these provinces with a compound annual growth rate of 31.4%.