From challenges to opportunities: favourable climate for the plastics industry
The plastics industry in ASEAN remains unperturbed by global developments that are also impacting the growth path of key industries. With K 2016, the world’s largest trade fair for plastics and rubber, coming up in Düsseldorf, Germany, from 19 to 26 October, we take a closer look at this market. The new norm of economic growths and trends such as oil prices, variable supply and demand, and weakening of most Asian currencies against the US dollar, have allowed the region’s countries to rediscover their strengths to sustain growth either individually or as a part of the collective grouping of the 10-member ASEAN (Association of Southeast Asian Nation), which comprises Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia. ASEAN’s fertile consumer base with a combined population of over 600 million and a combined GDP of US$ 2.6 trillion, as well as presence in the global market, enables the region to tap the right opportunities, hinging on the region’s rising middle class sector. One of ASEAN’s top export sectors by value is plastics and plastic products earning US$ 39.3 billion in export revenues in 2013. The sector’s production rates have witnessed a steady average growth over the recent years, especially in the ASEAN-6: Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam, which account for more than 95 % of regional GDP, according to McKinsey & Company. Vietnam’s relatively nascent plastics industry had an average annual growth of 16-18 % between 2010 and 2015. Packaging accounts for 37.4 %, followed by consumer goods (27 %), construction (18 %) and technical products (15 %). Yet, the industry is still at the “low end and of low value”, according to Vietnam Plastics Association (VPA), with a majority of exports being plastic bags to Japan. It also relies heavily on imported raw materials, like […]