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China's JV Top Polymer Makes A $15 Million Bet On The US
Yangzhou Chengsen Plastics Co.,Ltd | Updated: May 26, 2018

Rebecca KanthorMarcus Tsong, CEO of Top Polymer Enterprise Ltd.

To get his company ready for global markets and NPE2018, Chinese executive Marcus Tsong sometimes liked to think outside the business box and use a little more dramatic metaphor.

"With globalization, your team needs to be ready for anything, like a SWAT team," said Tsong, the CEO of Chinese compounder Top Polymer Enterprise Ltd. "You need to understand not only sales, but technology; if you miss any one of these, and fail understanding your clients' needs, you lose in the game."

Tsong and Top Polymer are making a big, $15 million bet that they can understand client needs in the United States.

The thermoplastic elastomer producer exhibiting at its third NPE, NPE2015 in Orlando, May 7-11. Less than a month before the show, it announced an investment of $15 million to set up a plant near Atlanta, its first outside China.

It hopes to significantly expand its business in North America. Tsong said being closer to customers in North America, which currently accounts for 20 percent of its global sales, can help with product development.

"The speed of information exchange and product upgrading is very fast," he said. "When it takes 17 hours to fly from China, it's not fast enough. What happens now is, we get the email and arrive at your door on the next day."

The company started in 2004 with a small factory in the city of Dongguan, near Hong Kong, and now has two facilities in China, there and in Liyang, about 150 miles west of Shanghai.

Tsong compares setting up the new U.S. plant in the small city of Social Circle, Ga., about 40 miles from Atlanta, to its earlier decision in 2008 to build a factory in Liyang. Both were driven by a need for closer connections with customers.

"When we develop something new, we show it to our clients to see if they're interested," he said. "Sometimes our clients come and bring up a new idea to solve his problem; it's a constant communication between us and them."

"That's why we chose Eastern China, Southern China and America to set up facilities and teams for producing and R&D to meet our clients' needs," he said.

The company makes a range of thermoplastic elastomer compounds, including styrenic block copolymers and thermoplastic vulcanizates. Its customers are in a range of end markets, including the automotive, electronic, packaging, consumer products and medical industries.

Tsong, in a late March interview at the company's headquarters factory in Liyang, said they're targeting North America to become a much larger part of its sales. Asia is its biggest market, with North America second, he said.

"Right now, our sales in North America haven't reached 20 percent of our [total]," he said. "Our expectation and plan is that the North American market will grow to 40 percent of our global sales."

The new Atlanta operation will be led by President Ralph Stone. The facility will open with three compounding lines and an annual capacity of 16 million pounds.

Tsong said he hopes it will have $10 million in annual sales in three years.

The firm started out making styrenic block, or TPS, materials in China in 2004 and expanded into TPVs to deal with what it said were limitations in TPS materials.

Today, it also makes thermoplastic copolyesters and thermoplastic urethanes, with a total of 13 compounding lines, capacity of 56 million pounds, and 150 employees in the two Chinese factories.

A push for more localization of product development in China is also driving Top Polymer.

In a statement, the company said it's "noticing a higher trend to localization in the automotive industry.

"This localization is providing interesting opportunities that for Top Polymer, being the material supplier, is allowing us to reassess our current capabilities and development processes," it added.

"We are investing in our research and development efforts, that in turn, is allowing us to address innovative customer/market requests and providing us with more opportunities," the firm said.

The company identified biorenewable elastomeric materials and what it calls an "enhanced" degradable elastomeric system as areas of R&D focus.

It says the U.S. facility, which is scheduled to be operating by May 2019, is also playing a part in the company's attempts to move into higher-value materials.

"We see the U.S. as a major player for the high-end applications and our U.S. facility and our investment in its successes as critical to our internationalization vision," the company said.

The decision to expand internationally was three years in the making, Tsong said.

"After 14 years of developing, we're now ready to serve our clients all over the world," Tsong said. "From R&D to marketing service, we think we're OK to do it now."

He said the company is eyeing other international markets; it sees strong potential for itself in India and South Asia. He recently returned from Pakistan to scout opportunities, he said.

But to reach its international goals, he said the company and its employees will need to maintain a sharp focus. Its markets within China are challenged by manufacturing overcapacity, he said, and if the company "can't keep focused and concentrated, it'll never win."

"In this case, being the leader of your company, planning directions and strategies for the company is crucial," he said. "It's the same with living a life — work hard and stay, or get kicked out of the game."

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