Fuling Global Says Mexico Plant Will Ease Trade Risks, Promote Latin America Sales

Fuling Global Inc. (NASDAQ: FORK), a maker of plastic food utensils for the fast-food industry, posted a letter to investors today about its plans to avoid trade complications and to increase the recycling of its products.

China-based Fuling Global explained its earlier decision to open a plant in Mexico. That plant will help the company avoid tariffs from changes in U.S./China trade agreements, transportation costs will be lower because much of the product will go to the U.S.

Mexican trade policies favor investment, the company said, and the plant may help the company increase sales in Latin America.

The Mexico plant will be open in June, Fuling Global said. The company also has production facilities in China, and in Allentown, Pennsylvania.

Chief Executive Officer Xinfu Hu also commented on the company’s plans to be more environmentally friendly. The use of disposable utensils has been criticized because it adds to plastic waste. 

Fuling Global has increased production of paper straws to 5 million per day, about 20 percent of its output. The use of biodegradable material for utensils instead of plastic is a challenge, the company said, because of the higher cost and consumers’ failure to recycle.

Fuling Global does not expect the use of biodegradable utensils to reach 20 percent within 10 years. To encourage recyling, the company will institute its own process, which it will share with recycling companies.

Plasticware that is now being sent to landfills may in the future be used for outdoor furniture and gardening products.

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