US adhesive products maker Avery Dennison Corp. expects a boost in its China business from Beijing“s entry to the World Trade Organisation (WTO), a senior company official said.
“With the opening up…
US adhesive products maker Avery Dennison Corp. expects a boost in its China business from Beijing“s entry to the World Trade Organisation (WTO), a senior company official said. “With the opening up of China“s markets, there will be more movement of goods to and from China, creating more demand for bar codes and labels,” vice president of Avery Dennison Hong Kong Christian Simcic told the China Securities Bulletin. Simcic said the company“s China revenues this year would rise much faster than 35%, the average growth for its Asia business. Revenues from China, Avery Dennison“s fastest growing market in Asia, rose about 40% in 1999, he said. The California-based company reported revenues of US$ 3.8 billion in 1999, compared with the previous year“s US$ 3.5 billion. After Avery Dennison closed six plants in North America and Europe, profits for the year were US$ 215.4 million against US$ 223.3 million in 1998. Simcic declined to provide a regional breakdown of the figures. “One of the challenges for China upon WTO entry is to meet international standards and quality,” Simcic said. He said some businesses in China still use glue on their labels and they would switch to adhesives to raise quality and productivity. “When you scan the bar code, you want to make sure that the quality is good, so you provide reliable information.” Simcic also said Asia“s information technology boom, a big user of labels, was likely to lift the company“s business. “Asia is just waking up to the computer industry. The usage is just minimum and that is huge potential for us. China has even more potential than anywhere else,” he said. Bracing for rising demand, the company has invested another US$ 40 million, apart from its US$ 30 million investment in 1994, to build three news plants in China over the next two years, Simcic said. The plants will manufacture its full range of products for China and the global market. “Ultimately, all of the plants will be used for the China market. But the next few years, which is our transition period, we“ll export to the rest of the world,” he said.