GERMANY • The ASEAN (Association of Southeast Asian Nation) plastics industry is set to witness an expansion – this says a report recently published by Messe Düsseldorf prior to the trade show K2016. The sector’s production rates have witnessed a steady average growth over the recent years, especially in Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam, which account for more than 95 % of regional GDP, according to McKinsey & Company.
According to the press release, Vietnam’s 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%). In Indonesia, food packaging is set to account for 70 % of plastic consumption sales (according to the Indonesian Packaging Association).
Malaysia has about 1,500 plastic production companies that export to Europe, China, Singapore, Japan, and Thailand. The packaging sector there accounts for 45% of the total plastic consumption market, followed by electronics (26%), automotive (10%) and construction industry (8%). Due to a rise in Malaysia’s minimum wage to USD 214 per month, plastic production costs have increased within the country by approximately 10% over the course of 2015.
Thailand’s plastic consumption is also led by packaging (48%), followed by electronics (15%), construction (14%), and automotive (8%). The country has also invested USD 60 million into bioplastics development over the past seven years.
Philippines has witnessed weak exports performance, down by 5.8% in the previous year, because of low demand from its top buyers: USA, China and Japan. The semiconductor and electronics industries account for the majority of the country’s exports. Various measures are being instituted to boost exports, such as the Generalised Scheme of Preferences (GSP) of the European Union (EU) that is offering export opportunities to the Philippines by allowing less or no duties on exports to the EU.
Regarding Singapore, about 95 companies are represented on Singapore’s Jurong Island with plants of companies such as BASF, ExxonMobil Chemical, Lanxess, Mitsui Chemicals, Shell and Sumitomo Chemicals. BMI Research expects Singapore to face an uphill climb in 2016, in the face of a Chinese downturn and regional oversupply.
Indonesia ranked as the most attractive country for new business expansion, followed by Vietnam, Thailand, and Myanmar – according to the ASEAN Business Outlook Survey 2014, published by the American Chamber of Commerce Singapore and US Chamber of Commerce. Availability of low-cost labour in countries such as Cambodia, Indonesia, Laos, Myanmar, and Vietnam, renders a competitive advantage.
In general, for the ten members of the Association of Southeast Asian Nation (ASEAN) – Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia a overall increase can be expected.