Qiming New Material Targets 500,000–600,000-Ton BOPP Pre-Coated Film Market, Plans IPO in 3–5 Years

[China Packaging Network News] Qiming New Material produces BOPP pre-coated film. According to the Wenzhou Municipal Science and Technology Bureau, it is a national high-tech enterprise, and its polypropylene film belongs to new materials. Wenzhou recently launched an action plan to cultivate five strategic emerging industries, listing new material producers such as Qiming New Material as key targets for future development.

No worries about product sales, but orders require advance payment. 'In recent years, we have never worried about sales. If you order our film, you may have to wait a month before it is available,' said Zhuo Ruyang. Customers placing orders with Qiming New Material must pay in advance. 'We have never done business on credit.'

Qiming New Material is a Wenzhou merchant returnee enterprise. At its founding, it served the local plastic weaving industry in Xiaojiang, producing ordinary film supplied to plastic weaving companies to laminate on the outer surface of woven bags, providing only simple functions such as waterproofing. Ordinary woven bags are cheap and demand little from surface film, so competition was fierce and margins were thin. The company's investors decided to improve film quality and open new markets with Wenzhou's packaging industry, investing more than 100 million yuan to import an advanced polypropylene film production line from Germany. At that time, only two companies in China had such transparent film lines, revealed Chen Kai, chief engineer of Qiming New Material.

Packaging made with BOPP pre-coated film is attractive and refined, and is welcomed by companies producing mid- to high-end packaging. 'In the past two years, long lines of trucks have queued outside our factory waiting for film to come off the line, and some customers wait about ten days for stock,' said Lin Yan'an, head of the Zhejiang Qiming Functional Film Research Institute. For this reason, Qiming New Material invested another more than 100 million yuan to order a custom line from a German equipment maker. This time, the company chose not transparent pre-coated film but matte pre-coated film, an area peers had not yet touched, and successfully brought matte pre-coated film to market that year. The product matched changing packaging demand, was quickly sought after, and production lines ran at full capacity.

A Wenzhou Daily reporter, accompanied by Chen Kai, visited Qiming New Material's two production lines. In the closed workshop, the two lines run non-stop, producing micron-level transparent and matte pre-coated film; two rollers weighing four tonnes each wind up the film, which after about ten thousand meters is sent to the back end to be cut into small rolls of various widths, then loaded onto trucks waiting outside for delivery. Qiming New Material's transparent pre-coated film is in short supply, mainly because it is thin and has small thickness deviation. According to the German equipment maker's requirements, the line is suitable for producing film of specific micron thickness with thickness deviation within a specific micron range. At the time, similar domestic manufacturers could generally mass-produce thicker products. Qiming New Material's R&D staff started with raw material formulations and, together with the Ningbo Institute of Materials Technology and Engineering, Chinese Academy of Sciences, challenged thickness limits, becoming the first in the industry to break through a thinner micron thickness and reduce thickness deviation. Lin Yan'an said that making film thinner requires overcoming static electricity and raw material ductility issues; the company's formulation can achieve a good yield in production. Zhuo Ruyang said that for products to lead peers, a company needs market sense, discovering opportunities from demand and then making technological breakthroughs. 'Our decision to add a matte film line came from opportunities found in the changing needs of surrounding packaging companies, and no peer has yet entered this area.'

Matte pre-coated film and transparent pre-coated film differ only in light transmission, but their production technology and raw material formulations are completely different. Chen Kai said transparent pre-coated film is made by combining three layers; if transparent film processes were used to make matte film, many light-transmitting spots would appear and yield would be low, so a four-layer combining technology was adopted, with the middle two layers as matte film, solving the light-spot problem. Increasing film layers requires major adjustments in raw material formulation and production process. To better carry out R&D on processes and formulations, Qiming New Material established a functional film research institute, attracting technical talent to tackle difficulties; it has now been upgraded to the Zhejiang Qiming Functional Film Research Institute. The company is developing colored pre-coated film, has successfully developed red pre-coated film, and will develop more colors as well as anti-slip film and other new niche film products as market demand requires. In fact, Qiming New Material's pre-coated film competitiveness lies not only in thinness but also in lower cost than peers. This is mainly because raw materials differ from peers and production consumes less energy. Through technical upgrading of production equipment, when plastic pellets are fed in to melt and stretch, the equipment heating temperature is considerably lower than peers'. Electricity consumption accounts for a large part of film production cost, and some similar domestic film companies have moved factories to Southeast Asian countries to reduce power costs.

Extending downstream. At present, market demand for pre-coated film has expanded from tens of thousands of tonnes a year a few years ago to 500,000-600,000 tonnes, but packaging companies' demand for such films is segmented, requiring film producers to make diversified products. In fact, once film companies produce diversified products, costs are hard to reduce, and packaging companies will not purchase such products. Even with one more production line, Qiming New Material's annual capacity would still be below a certain scale and annual output value limited, making it impossible to enter the capital market, let alone further expand and strengthen the company. The film industry requires large investment but has a relatively long payback period. Zhuo Ruyang found that many customers are doing well in niche fields, and some are even leaders in their sub-industry, yet cannot grow further due to issues such as market capacity. Therefore, building the Qiming Functional Film Industrial Park became the next plan: by joining forces with leading companies along the industry chain and developing as a group, Wenzhou's packaging industry can break through.

On Zhuo Ruyang's desk, the planning drawings for the Qiming Functional Film Industrial Park are already bound into a booklet. It is an extension of the current plant area. The park will bring in various downstream packaging companies. 'We will develop dedicated film products for these companies, and can even customize film products, making their products more competitive and helping them become strong players in niche fields,' said Zhuo Ruyang. After a group of companies gathers in the park, packaging buyers can achieve one-stop procurement, while the packaging companies in the park can enhance their industry voice. Of course, Qiming New Material hopes companies in the park will ultimately develop further. 'For promising companies in the park, we are willing to acquire equity through various means, then go to the capital market, and use the capital market to develop deeper into the industry.' In Wenzhou's strongly promoted listing program, Qiming New Material has been included in the list of companies planning to go public. The company plans to successfully list after 3-5 years of development. Zhuo Ruyang looks forward in this way. -- This article is reprinted from China Packaging Network (pack.cn), original link: http://news.pack.cn/show-352356.html