Just got back from a 2 week trip in China where I traveled to different cities to visit our equipment suppliers. Leaving North America, where we are in one of the worst slumps in our industry, I didn't know what to expect from the folks in China. I first visited several converters near Shanghai and they all seemed very busy and running at normal capacity.

I then flew to Guangdong Province to visit the equipment suppliers and it was an eye opener. Our Slitter supplier has orders booked up till next June. He said, in the past few weeks, he had to turn away many orders because he did not have any more production capacity. He is actually busy looking to buy land to build his new factory because the existing factory is limiting his production output.

Jinming, the extrusion machine supplier did not have the same problem. They just moved into their new factory, a complex of over 100 acres. It is believed to be the biggest manufacturing facility for film extrusion lines in the WORLD. They are very busy and have orders booked solid for the next two quarters.

In the same city, I also visited a flexographic printing press factory, one of the best in China to make CI  flexo presses. PEC Canada will carry their line.

Near Guangzhou, I visited the No. 1 Cast Film Line manufacturer in China - same story, lots of orders.
Same scenario for the plastic bag making machine and pouch bag machine manufacturers - everyone seemed to be pleased with the way business goes.

What causes this phenomena that the whole world is in a recession but the equipment suppliers in China are getting orders at a record pace? I asked a lot of questions and one of the obvious answers was that most of the orders were for domestic markets, some are for developing countries in Asia, Eastern Europe and the Middle East. Almost none comes from North America.  To lessen the blow of the worldwide recession, China has implemented several stimulus programs and one of them is to provide incentives to encourage purchase of capital equipment from domestic manufacturing industry. For example if a plastic film converter places an order for a blown film extrusion line, it will receive a 17% tax rebate - that is money in their pocket and they may use this money to buy a slitter rewinder or a bag machine etc. This creates a chain reaction and what we see is boom time for a lot of the equipment manufacturers. Even parts and component suppliers are getting busy. I heard some of the part supplies in Japan simply ran out of inventory and the suppliers had to divert products from other parts of the world into China.

We just hope this scenario will have positive impact on the rest of the world and hopefully boom time will come to North America soon.
Anyways, I am looking forward to seeing you next week at the Pack Expo in Los Vegas. Visit us at booth S-5985.