China’s wood-plastic composite manufacturers continue to expand, thanks to demand from domestic public projects.

Nanjing Jufeng Advanced Materials Co. Ltd., with 20,000 metric tons of annual capacity, is adding a TC 86 wood-plastic extruder from Milacron. “It’s the first of its kind in China, and will raise our total capacity to 30,000 metric tons,” Jufeng’s information manager Chyi Bo told Plastics News at the recent Chinaplas show in Guangzhou. The new line is scheduled to start running this month.

Exports still dominate Jufeng’s revenues, but the company’s domestic sales are growing. It is considering the possibility of opening a plant in Sichuan provine, in order to supply building materials to post-earthquake reconstruction projects.

Anhui Guofeng Wood-plastic Science & Technology Co. Ltd. confirmed that export demand has been contracting due to the global economic crisis. Meantime, domestic consumers have become more aware of wood-plastic composite materials.

“The Beijing Olympics helped introduce the material to the general public,” marketing manager Lu Qinyong said in an interview. Guofeng’s wood-plastic composite products were used to decorate walls in the Beijing Olympic Village as well as to construct outdoor facilities in the Olympic Park.

A large portion of the post-quake temporary housing used in Sichuan was made out of wood-plastic composites, said Liao Zhengpin, president of Beijing-based China Plastics Processing Industry Association. “They are easy to assemble and disassemble, environmentally friendly and recyclable.” Guofeng was one of the companies that supplied the temporary housing.

Jufeng, a nominated supplier of wood-plastic composite decking to the World Expo 2010 to be held in Shanghai, said one key to develop China’s domestic market is to expand sales and distribution network. “We need both [brick and mortar] stores and online outlets,” Chyi said.

Futuresoft Technologies (Beijing) Co. Ltd. has opened a retail store in Beijing specifically selling wood-plastic composite products, company executive Ma Baigang said in a speech at Chinaplas.

Ma pointed out the potential in the auto interior market.

“Our industry has gone through the first stage of making pallets and the second stage of outdoor applications,” he said, “The third stage is indoor furnishing and auto interiors -- especially injection molded auto interior items are highly profitable but undeveloped in China.”

China’s wood-plastic composite industry’s current total capacity falls in the range of 100,000 and 150,000 metric tons, according to Toland Lam, president of the Wood-Plastic Composite Products Committee of China Plastics Processing Industry Association. Annual sales are currently about 800 million yuan. Both figures are expected to grow in the next three years, he said at Chinaplas.

“By 2010, there will be about 200 [wood-plastic composite] processors in China,” Ma added.

However, the industry faces the challenge to go beyond public projects and penetrate the consumer market. “Lower costs … will be required for a real breakthrough of domestic consumer sales,” Chyi said.