China’s TK Mold Sees Auto Growth Amid US-China Trade War
Chinese mold maker TK Group (Holdings) Ltd. is laser-focused on North America, seeing both opportunities for new business and significant challenges from the threat of a trade war between the U.S. and China.
The opportunities include growing demand for its molds from the auto industry in North America, prompting some new investment in mold testing and technology upgrades at its Shenzhen, China, manufacturing campus.
“We need to invest European and American conditions here in Shenzhen,” said Joerg Wehling, TK’s general manager for precision mold making.
But there are also threatening clouds on the horizon in the form of potential U.S. tariffs of 25 percent against its Chinese-made injection molds.
Those are prompting the company to huddle with U.S. customers to discuss strategies to cope with the potential trade war.
“We need to find an appropriate answer together with our customers to this trade war,” Wehling said in a late April interview. “The customers do not want to pay the 25 percent. I do not want to find the 25 percent.”
While the tariffs are still being debated, he said, “the change can come pretty quick and we want to be prepared.”
TK makes injection molds for the packaging, medical, automotive and electronics industries at its Shenzhen facility, just across the border from Hong Kong. It’s upgrading its mold testing facilities there.
“I need to refurbish the complete mold-trial room to create strict environmental conditions, such as water temperature, water pressure, air conditioning.” he said. “It’s mandatory so I can qualify a mold for European and U.S. users.”
The upgraded, auditor-monitored facility will also feature a clean room and would guarantee intellectual property protection, Wehling said.
“I want to get the molds thoroughly approved here in Shenzhen so we don’t have any issues once the mold is delivered,” he said.
The company, one of China’s larger export mold makers, said it’s upgrading in part because the price advantage for Chinese mold makers over U.S. and European competitors is shrinking. Wehling estimates the price advantage has halved in recent years to about 20-25 percent.
“Selling only by price is quite difficult. You come under pressure again and again,” he said.
TK can craft and deliver a mold in three to eight weeks, Wehling said.
In the fiscal year that ended Dec. 31, TK’s mold business was steady…..
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