Groz-Beckert KG

Newsletter 1 | 2012

Interview:
COSTIN, an up-and-coming company in China

The company COSTIN is famed throughout the Chinese market for high-quality products in the nonwovens sector. A short while ago, Mr. Bernd Kapfenberger and Mr. Tomy Li from Groz-Beckert had the opportunity to interview two high-ranking personalities at COSTIN: Mr. Yusheng Tian and Mr. Viso You, Vice President and Vice Manager of the company respectively. The two men gave reasons for their company's success on the Chinese market as well as an insight into upcoming corporate objectives and developments. Gain additional knowledge from this practice-based dialog!

"Mr. Tian, Mr. You, may we first of all kindly ask you to briefly introduce yourselves to the readers of the Groz-Beckert Newsletter?"

Mr. Tian: As a Vice President of COSTIN, I am responsible for the entire production site management. I joined COSTIN last year only, but do still have many years of experience as far as needle felt nonwovens is concerned.

Mr. You: As a Vice Manager of COSTIN I am in charge of advertisement and publicity-related affairs as well as brand rights, copyright and finally patent law.

"In China COSTIN is very well known to the market of needle felt products. What key figures of COSTIN would you outline to those readers that haven't heard of the name before?"


Mr. Jackson Chim, Chief Executive Officer at COSTIN

COSTIN: Our headquarters are located in Hong Kong. The production plants are in Jinjiang, south of Fujian province, southeast of China. COSTIN started their business in 1999, up to now, we have more than 1,000 employees. From 2010 to 2011, we doubled our total production capacity.

Our main business ranges from recycled Polyester fibers to needle-punch nonwovens and stitch bonding nonwovens, which is a special and reasonable industrial chain. The products' end users are covered shoes, filtration, geo-textiles and household textiles. Now, back-up the strong R&D and application capabilities, we can fit for nearly all types of needle-punch nonwovens and stitch bonding market demands. Our products have been sold to domestic market and overseas market in the same amount, our overseas market are Brazil, India, Mexico, Malaysia, the UAE, South Africa, Netherlands and Russia - to name but a few.

"In 2011 COSTIN installed two new production lines from a German supplier as well as four lines from domestic machine builders. Can you tell us more about that?"

COSTIN: With the German looms we intend to produce mainly filtration felts. The other looms will needle various needle felts for the shoe industry as well as products for the household. In total we have 12 production lines now. Nine lines are primarily base material for artificial leather, and the remaining 3 lines are focused on filtration felts.

We should point out that the emission laws for the iron, steel and cement industries as well as for coal-fired power plants have recently changed in China. The latest law allows a maximum of only 30mg/Nm³ dust and pollution. Before, it was in the range of 50 to 200mg/cm³. The new law was effective from 1st of January 2012. That's why many of the factories mentioned will have to install plenty of new bag filters, as well as replace the used ones at an earlier stage than before. Some estimate that future demand will be in the area of 10 billion RMB for 2012. By the way, for industrial filter bags we won't be using any recycled PET fibers, since such products rather require fibers like PPS, P84, Aramide or PTFE.

"What are COSTIN's other plans for the medium and long term?

COSTIN: A new project involves an investment in a fiber production line in Yongan, where recycled PET fibers will be produced. In October 2010 the Certificate Association of the USA certified COSTIN. This guarantees that all products coming from COSTIN are based on environmentally-friendly produced and recycled PET fibers, based on PET flakes and PET bottles. The exceptions here of course are the special fiber products mentioned earlier.

In addition to last year's investment, this year we are going to a further 12 new production lines for mainly high-quality-level artificial base material. We also intend to supply the automotive industry with products. The total investment from 2011 to 2013 is more than 1 billion RMB. Apart from filtration, geotextiles, household fabrics and shoe interlinings we will also be doing automotive fabrics soon. In fact, we consider product diversification to be key to our marketing success.

"What trends do you detect in the Chinese nonwovens market?"

COSTIN: Well, we currently see significant growth in the demand for filtration felts, but we also see the nonwovens market for artificial leather base products shrinking at the moment. Among other fields, COSTIN is supplying fibers to this specific sector of the nonwovens industry in terms of roughly 80 % of their total need. Recent visits to the artificial leather factories in question made it clear that production seems to be down by 30 %. This trend began a few months ago and there currently seems to be no end in sight. Nevertheless, in the long run we strongly believe in market growth, no matter what application field we are talking about.

That's why our strategy is based on long-term rather than short-term predictions. And in the past it was not difficult for all factories to grow and expand, as the market as such was growing significantly as well as steadily. In the future, the development of new products will create a differentiation. Some providers will be in a position to supply high-quality products for special applications, while others will continue to produce commodity fabrics just as they have until now. That's why COSTIN maintains a close cooperation with schools and universities, and is constantly investing in new machinery and technology.


"What else comes to your mind as far as the strengths of COSTIN are concerned?
"

COSTIN: The market is actually guiding COSTIN in the right direction. COSTIN is also reinvesting a lot in new machinery, which means their machine set-up is always state-of-the-art. Furthermore, we are looking for experienced employees only. And, above that, the product quality provided by COSTIN, as well as its high service quality standards - a must these days - are clearly setting the company off against the competition.


"How far do you rely on Groz-Beckert as a powerful partner to achieve your ambitious aims?"


COSTIN: In future, COSTIN is expecting from Groz-Beckert the same technical support as given in the past. The product quality level should be kept at a very high level, and further needle developments support COSTIN's course for success. COSTIN places great value on Groz-Beckert's support in the form of regular visits for keeping up to date with the latest developments in conjunction with the new Technology and Development Center (TEZ). Our annual needle consumption - already a two-digit million figure - will continue to rise in future. We see a lot of potential for new needle developments with long lifetimes, and hope to get as many technical surprises from Groz-Beckert as we have over these past years.


Mr. Tian and Mr. You, we thank you very much for this interview and wish you and COSTIN all the very best for a prosperous and successful future together with Groz-Beckert.