Punching above its weight
While often viewed in the shadow of its massive Northern neighbour, China, the Southeast Asian group of nations known as ASEAN continues to be a hotbed of activity in the plastics and rubber sector.
This comes as little surprise given that the region's population is fast approaching 600 million, while its overall GDP of $1.5 trillion rivals that of Spain and Canada and economic growth continues to be strong, particularly in emerging markets such as Vietnam.
The region continues to evolve and redefine itself as a manufacturing base. Take e.g., the automotive industry in Thailand that employs over 300,000 people and comprises 12% of the overall GDP. There are already 1,800 automotive parts suppliers, of which about 700 are OEMs, including household names such as France's Valeo, Germany's Bosch and US-based TRW. Furthermore, vehicle production is expected to hit around 2.55 million vehicles in 2014, by which time Thailand will be ranked 9th globally in the automotive stakes, between heavyweights France and Mexico.
In the electrical appliance sector, Thailand is ASEAN's largest production base, with 800 factories manufacturing products like air conditioners and refrigerators. The country is also a leading hub of white goods production for Japanese, Korean, European and US multinationals.
Having lost out in the electrical sector, Malaysia is carving a niche in power tool housings and the moulding of medical device and personal and consumer care parts. In the packaging sector, Malaysia has transformed itself into the leading supplier of linear low-density polyethylene (LLDPE) stretch film, with processors diversifying into multi-layer modified atmosphere packaging (MAP), stand-up pouches and medical packaging.
Meanwhile in Vietnam, the packaging sector currently accounts for about half of the plastics processing industry's output in the country. Bolstered by growth, per capita plastics consumption has increased dramatically in Vietnam, from less than 1kg in 1990 to around 30kg in 2009. Another key to growth is infrastructure investment as is the electronics industry, which will have an export turnover $5.2 billion this year and is targeting a growth of 30% per annum.
The trend of late in Singapore, especially in the electrical and electronics sector, has seen more plastics companies utilizing their headquarter operations for new product development and introduction, and in some cases tool making. Singapore is, however, making a concerted push into other higher added value areas such as the medical sector with 17 of the world's leading medical devices companies having invested in more than 20 manufacturing plants in the city state.
There is no doubt that plastics and rubber processors in ASEAN are continually being pushed to maintain and improve their efficiencies and competitiveness in order to remain relevant to the regional and global manufacturing landscape.
One indicator in this effort is the high level of utilization of all-electric injection molding machines. Green technology is also emerging as a market for these same processors to serve. Take solar panels and solar thermal technology for water heating, which are produced in Malaysia, the Philippines, Singapore and Thailand. Small-scale wind turbines are also a potential area that may open up market opportunities in green technology while another sector that is fuel cells that deserves attention.
Other growing interest is coming from the bioplastics (resins that are biodegradable or derived from plant-based sources) sector with the Asia Pacific region to be the growth driver by 2013, according to market research firm Freedonia Group. While most of the growth is expected to come from the non-ASEAN country of Japan, more activity is being seen in countries like Malaysia and Thailand. Here, multinationals and government-influenced biotechnology clusters are setting the pace for the manufacture of bioresins, confirming that the ASEAN region is not going to lag behind in the fast moving pace of the plastics and rubber sector.
No matter if manufacturers and processors are engaged in classical plastics and/or green technology, all ASEAN as well as Chinese, Japanese und other players in the Asian region are eagerly looking forward to the K trade fair 2010 in Duesseldorf, Germany. The number of exhibitors making the trip from Asia has been rising significantly since 2004 as did the number of trade visitors. From the roughly 242,000 trade visitors attending the world's No. 1 fair of their industry in 2007 some 30,000 specialists came from Asia - 7,000 more than at the previous event in 2004.
