Auckland engineers break in to Chinese plastics market

An Auckland-based company has jumped into the lucrative Chinese plastics industry with a contract to export thousands of dollars worth of tools to a Beijing bottle-top factory.

RPM Engineering, of Albany, has landed a $500,000 contract to manufacture mouldings for Fulong Plastics, a Beijing-based plastic goods company which supplies bottle caps and other products to the Chinese beverage industry.

RPM Engineering director Peter Smith said it was the 13-year-old company's first export deal and he expected to sign another contract next year, worth $1 million, to manufacture more tools for Fulong.

"We can make a lot more money overseas, selling our products for 15 per cent more than we would get in New Zealand," he said.

New Zealand's largest privately owned tool maker, RPM employs 27 people and manufactures equipment for companies such as Fisher & Paykel and Scott Technology.

Fulong Plastics managing director Weagan Long, who has an engineering background and emigrated to New Zealand 10 years ago, said he awarded the contract to RPM because the company could produce higher-quality products at lower prices than Chinese tool manufacturers.

"In New Zealand there is good experience and expertise in this area.

"We could get US and European companies to do the same job, but it would have cost about 50 per cent more."

Mr Long returned to China to set up Fulong two years ago after working as a labourer in a New Zealand-based plastics company.

Fulong, which is not required to pay Government taxes until 2004, had after-tax profits of $US4 million for the 1998-99 year.

Mr Long said Fulong would contract RPM to manufacture additional tools if the Chinese company continued to grow at its present rate.

"There is so much growth in the Chinese markets, in two years we already have 10 per cent of the market."