Ties That Bind - Bay Area Council Economic Institute

110
Ties That Bind
recycling, which will dramatically increase the recycling stream and demand. Similar laws have
been passed in Taiwan, South Korea and Japan, and recycling capacity remains tight because of
the complexity in separating plastics from other materials, and different plastics grades and colors,
in products with sophisticated electronics components.
The U.S. has no such regulations, meaning that a lot of recyclable plastic ends up in dumps and
landfills. A lack of steady raw material supplies has limited expansion potential for the Richmond
plant, Biddle says. The Guangzhou plant—55% owned by MBA Polymers and 45% owned by
GISE—has double the capacity of Richmond, and 100 workers versus Richmond’s 22. Low labor
costs, government incentives in the development zone and modern equipment will help
MBA Polymers produce its recycled plastics for a low $200–300 per ton, increasing its margins.
State-owned GISE’s government connections helped smooth permits and approvals. Prospective
customers Toyota, Honda and BASF, as well as GE Plastics, have operations in or near Nansha
Development Zone.
The China joint venture, and a similar one in Austria, have improved the viability of MBA Polymer’s
overall operations. Biddle says the company intends to maintain Richmond as a headquarters,
R&D center, demonstration center and production facility. It has hired additional engineers
there and has made additional capital investment to modernize and increase output.
Another company Galaxaco has taken to China is Silicon Valley-based Arasor. Led by overseas
Chinese who are now U.S. citizens, Arasor is developing broadband wireless architecture for the
2008 Beijing Olympics that will enable visitors at one event to watch multiple events simultaneously
through their personal digital assistants (PDAs). Arasor’s R&D is done in both Silicon
Valley and China.
A China Strategy Helps a
Small Manufacturer Survive
SKS Die Casting, in Alameda, grew with the computer industry.
As the economy stumbled and more components were outsourced
overseas, however, profits dropped by half and its employees
by almost two-thirds. Silk Road Enterprises (SRE), a
company founded by then-San Francisco State University
President Cai Wei Woo to facilitate tech transfer to the computer
industry in China, introduced several teams of Chinese
engineers to SKS, which led in1984 to a joint venture between
SKS and SRE called Pacific Die Casting and Machining to explore
a joint venture in China. This led in 1987 to an invitation
from China’s Ministry of Science and technology and the China
National Electronics Import and Export Corporation to submit a
proposal to build a modern die casting and machinery facility
in China.