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China: an emerging power in nonwovens.

China represents the largest untapped market for nonwovens, nonwovens equipment and joint venture opportunities in the world. Previous Western thinking and prejudices had placed a reduced emphasis on exploring and developing the market potential of the Peoples Republic of China (PRC).

Our traditional Western impression of the PRC has been that of a technological backwater, where many things are produced in great quantity but with little attention paid to quality. Secondly, we judge the PRC as a very poor country with great population resources but little material wealth.

If indeed history does repeat itself, then we must remember that the Japan of the 1950's to early 1960's also exhibited these same characteristics. Unlike the Japan of that period, China does have the natural resources with which to develop and produce materials, of sufficient quantity and quality, for nonwovens production.

China has the prerequisites to develop into a world power in nonwovens manufacturing. This will not occur overnight. However, within the next 15 to 20 years, the PRC will be competing directly with the European, Asian and North/South American roll goods producers in establishing dominance within the world markets. The facts behind this statement are:

1. Recent talks have been initiated for accelerated development of large reserves of petroleum and natural gas fields utilizing Western and Asian oil company technology. These oil fields are located in the southern and northeastern parts of China and are either on or near coastal areas

The development of these reserves will assist the PRC in obtaining the hard currency and raw materials for developing industries whose products can be sold abroad. Nonwovens material producers, those already existing and future ones in the PRC, will be one of the beneficiaries of the increased revenue and reserves.

2. The discussions with the oil companies have also included the construction of facilities for the conversion of oil/gas products into resins for use in nonwovens and synthetic staple fiber production. The PRC realizes that Western processes and training are required in order to become more globally competitive.

With the government able to support resin prices below those at the worldwide level, the nonwovens producers within the PRC will be able to produce materials at a substantially lower cost. The recent success of Amoco and Amoco Fabrics and Fibers Ltd. at the Yizheng facility has helped to improve the government's willingness to allow direct Western involvement in their enterprises.

3. The de-collectivization of the cooperatives and the introduction of limited land ownership by individuals or families has already begun. Previous state imposed quotas on natural fiber production will soon be lifted and this will cause an increase in the production of these fibers for woven and nonwoven usage, particularly in the areas of cotton linters and gin motes.

4. The government of the PRC is scheduled to eliminate the dual monetary system by 1996. The current currency structure issues foreign exchange certificates to foreigners and outside companies. The population is limited to the use of the Renminbi currency. The movement to a one currency system meets the requirements of the World Bank in the lending of credits for future development.

5. The PRC is actively seeking the technology and experienced partners in nonwovens with which to build new facilities. The desire not to repeat the past mistakes and to actively educate their staff in nonwovens processes has never been more evident than at this time.

6. The government is seeking jointventure team members who will have active participation within the operation of the facility. The PRC has created tax incentives for foreign participation. Among these are:

- import duties are waived on all equipment brought into the country.

- taxes on produced goods are waived for a three year period.

- reduced taxes are paid in the fourth and fifth years.

When foreign investment is made in a nonwoven mill, the ability to operate the factory according to Western practices becomes acceptable. There can be a selective hiring process and the government encourages the facility managers to adopt the management style of the partner.

7. The Bank of China also encourages the practice of foreign investment by making the availability of loans easier to those companies that can show a commitment to the project on the part of a foreign investor.

8. The Chinese mill managers are reading quality guru Demming and are participating in "problem solving" analysis programs such as Kepner-Tregoe. The term "Less is More" is coming into practice.

Government Direction

The government of the PRC is dynamically reorganizing the structure of industrial production and the methods by which goods are manufactured. Under the old system, the product to be made was determined and specified by the government in an assigned quantity. All aspects of manufacturing were dictated by the local party.

The new system, though in its embryonic stage, allows the local factory managers, with the approval of the local or regional government, to determine the market and the type of output at the plant. The factory managers are now responsible for developing the market, planning production quotas, executing expansion, hiring qualified personnel and meeting quality standards.

The turn towards a demand market economy has created a problem in securing staff who are expert in their fields. The Chinese are learning that in order to obtain this talent, monetary inducements, bonuses and perks must be granted. There are increasing examples of mills hiring away personnel from their "competitors" in order to secure the needed expertise.

The PRC is making it easier for successful companies to hire qualified personnel outside of their province by reducing travel restrictions. The removal of these impediments means that companies can successfully pursue and obtain capable employees.

Although not yet readily visible, the PRC government has given thought to a performance-based employee and employer relationship. In the past, employment was guaranteed regardless of the worker's performance. The factory managers and work teams now have the right of review for a peer.

There have also been rumors in Beijing that the Textile Ministry, which oversees nonwoven production, is soon to have a staff reduction of 50%. This is consistent with the government's current plans of shifting responsibility for decision making to the mills and factory managers

Nonwovens Direction

The nonwovens industry in China has traditionally been in the areas of fiberfill, needlepunched, resin bonded and carded-thermally bonded materials. Because of the raw material requirements as dictated by the above list, the Chinese have been gaining in experience in the formation and production of staple fiber.

This by itself has importance in that:

1. The factories have gained the knowledge of staple fiber manufacturing.

2. The factories are learning the benefits from single or dual sourcing of raw materials in resin form.

3. By limiting the supply of resin to two manufacturers, the equipment in the plant can be "tuned" to the properties of these polymers. The results can be clearly demonstrated in some of the newer fabrics being generated.

4. This tuning of the equipment, or repeatability of the process, is the first step in obtaining consistent quality in the output of the factory.

Those items listed above represent a significant step in the ongoing evolution of the PRC's nonwovens industry. They also meet the primary conditions in establishing viable second generation enterprises in the areas of spunbonded and melt blown technologies.

Currently in the PRC there are several known spunbonded units producing varying degrees of lightweight materials. These machines have served to introduce the Chinese to the potential of spunbondeds but have not fully demonstrated how spunbondeds should be produced.

While it is true that the material has had a hard time competing with established producers, it is not due to a lack of effort on the part of the mills. In order to understand why quality and consistency are now issues, we must evaluate the conditions preceding the sale and during the design, building and installation phases of these units:

1. Emphasis has not been placed on the need to have qualified fiber/extrusion engineers and lab scientists as part of the staff prior to beginning the design. These individuals eventually will be responsible for maintaining mill operations and continuing the education of the mill staff.

2. The factory and process engineers have not been adequately versed in the reasons for limiting resin inventory to just two sources. Most experienced nonwovens personnel understand that the raw polymer properties of different resin suppliers vary greatly when processed.

3. The need for analytical equipment has only been stressed for the finished product. The necessity for assessment of each batch of polymer resin prior to introduction into the system, and the equipment required to perform this analysis, needs to be reiterated.

4. The mill personnel have not had a participant role in the engineering phase of the project. Ownership is not solely limited to the purchase of a machine. To fully understand the operation, a qualified engineering staff needs to be present at the supplier's factory to learn the basics of the machine.

5. The process controls delivered have been of an adequate design; however, little effort has been made in educating the Chinese on how to program and manipulate the process variables other than for standard products initially specified.

6. The justification for data gathering during the process, to establish history and continue repeatability, has been mostly ignored.

7. Proper maintenance and training procedures need to be a part of the complete system. The need for scheduled preventative maintenance programs have not been emphasized or demonstrated.

The combined effects of the above have built inefficiency into the facilities prior to the installation of the units. It also becomes obvious that the full potential of the individual machines cannot be realized.

The PRC and the Ministry of Textiles are beginning to recognize these problems within their nonwovens industry. They are also initiating a response to secure positive change and control prior to the building of new nonwovens facilities. Their concerns have become evident during the past 18 months with the significant increase of activity regarding spunbonded and melt blown processes.

In recent meetings with representatives of several factories and staff from the Ministry of Textiles, this new direction has been disclosed. The effort to increase the productivity and quality of the mills has produced this list of points, which are now non-negotiable.

1. PRC mill engineers will now become part of the overall design team during the planning, design, construction and start-up phases of the plant.

2. A minimum of four engineers will be at the machine manufacturer's site during the design and fabrication process. These engineers will be responsible for assisting, drawing, reviewing, checking and programming, under the guidance and supervision of the supplier. This represents the initial training phase of their personnel.

3. Operating and training manuals for all mill operations will now be prepared and customized for the mill associates to execute during the construction, engineering and process checkouts/trials. The mill engineers, under the direction of the supplier, will conduct these training sessions.

Also, equipment vendors whose machinery is integrated into the supplier's system are now required to conduct training sessions at the site.

4. The path toward ISO 9000 certification of the material and factory will be defined prior to issuance of an order for equipment.

5. Where possible, equipment that can be fabricated and assembled within the PRC will be done so. A list of those items are to be submitted prior to an order being placed.

Tremendous opportunities exist in China for those companies who are willing to recognize the need to work with the Chinese in developing a viable nonwovens industry. To be successful, those corporations who wish to participate must rethink their approach to business and discard the goals of short term gains.

Mr. Harmon has traveled extensively in China and is in direct contact with the Ministry of Textiles in Beijing. His company is currently in the process checkout phase for a two meter melt blown unit in Shandong Province. HSJ Group, Inc. specializes in nonwovens and turnkey installations. Mr. Harmon can be reached at 1254 Old Alpharetta Road, Alpharetta, GA 30201; (404)-343-8505.
COPYRIGHT 1992 Rodman Publications, Inc.
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Author:Harmon, Jerry W.
Publication:Nonwovens Industry
Date:Nov 1, 1992
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