Vietnam's troubles take a toll on Chinese exporters

By Steve Toloken
News Editor / International

Published: November 1, 2012 6:00 am ET

Borch Zhu, president of Chinese firm Borch Machinery Co. Ltd., said in spite of difficult conditions in Vietnam, his company is considering opening a factory there. (Plastics News photo by Steve Toloken)

Related to this story

Topics Materials, Machinery

HO CHI MINH CITY, VIETNAM (Nov. 1, 10:10 a.m. ET) — Vietnam’s economic slowdown is proving a tough hurdle to overcome for mainland Chinese and Taiwanese plastics industry exporters, although some of them say they continue to see long-term potential there.

Chinese and Taiwanese firms outnumbered exhibitors from everywhere else at the recent VietnamPlas show in Ho Chi Minh City, but there was cautious tone among the companies.

An executive with plastic pipe extrusion equipment maker Sichuan Goldstone-Orient New Material Equipment Inc., for example, said the market in Vietnam did not look good this year, as spending on construction projects lags that of neighbors in Southeast Asia.

“We are opening the markets in Thailand and Indonesia and now in Vietnam,” said Wood Han, sales executive with the Chengdu, Sichuan province-based firm. “But we feel the economy [in Vietnam] is not doing well. It needs some years to upgrade.”

“Thailand and Indonesia have more interest in construction,” said Han, who said his company makes equipment used to manufacture higher-grade pipe, like plastic-steel composites.

Statistics seems to bear out the anecdotes at VietnamPlas, which was held Oct. 24-27.

Taiwan’s plastics and rubber machinery industry, for example, reported that its exports to Vietnam fell 18 percent in the first half of the year. Vietnam is Taiwan’s fourth largest market for machinery exports.

Vietnam’s Prime Minister recently made several very public apologies for government mishandling of the economy, including its supervision of large state-owned companies. Inflation hit 18 percent last year, and Vietnam’s GDP growth is expected to slow to 5.2 percent this year, the slowest rise since 1999.

An estimate from one of Vietnam’s largest plastic pipe makers, Binh Minh Plastic Joint Stock Co., said industry growth in 2012 would be half its historical average, growing 8-12 percent rather than 20-25 percent.

One of China’s largest injection press makers, Borch Machinery Co. Ltd., was in the future potential camp in assessing Vietnam.

The market now is only so-so and is weaker than neighboring Thailand and Indonesia, but the Guangzhou, Guangdong province-based company is nonetheless considering opening a small manufacturing plant in Vietnam as a base for Southeast Asia, said President Borch Zhu.

Companies in consumer packaging seemed to be doing better.

Plastic cap and PET preform maker Taiwan Hon Chuan Group is planning to expand molding capacity at its factory in Binh Duong Province, near Ho Chi Minh City, said Nelson Huynh, sales section manager.

“The market for consumer goods is quite strong,” said Huynh. “I think in Vietnam the market is very open, especially in PET bottles. It is a good future.”

Hon Chuan opened the Vietnam plant in 2011 and said it’s seeing solid business from multinational consumer product makers.

Overall, long term projections are for rising resin consumption in Vietnam, with consumption nearly doubling from 16 kilograms per person in 2006 to 30 kg. in 2010, according to the Vietnam Plastics Association.

But there was a sense among exhibitors that Vietnam may be losing what was once seen as a regional edge, in particular to Indonesia.

“Vietnam somehow is very, very slow,” said Paul Siu, Hong Kong-based managing director of Asia for German mold maker and brush equipment maker Zohoransky Group. “Indonesia is growing very fast. We are going fantastic in Indonesia.”

Siu said a few years ago customers talked about moving production from China to Vietnam but those plans never seemed to materialize. Recently, a customer did shift half of its production away from China, but it was to Indonesia, he said.

Chinese press maker Haitian International Ltd. said Vietnam is a very price sensitive market.

Business for the company, which has an assembly plant in Vietnam, is better than for competitors but probably not meeting expectations, said Zhang Hao, general manager of Haitian’s Huayuan (Vietnam) Machinery Co. Ltd. factory in Binh Duong province,

“Vietnam is not so easy of a market,” Zhang said, adding that Indonesia “has recently become very nice.”

Chinese masterbatch additive maker Sunshow (Yantai) Specialty Chemical Co. Ltd. of Yantai, Shandong province, was at its first VietnamPlas.

“I don’t think it is a very big market. This is a small exhibition,” said Deputy General Manager Billy Chen, gesturing to the trade fair around him. “I am coming here to explore and find some suitable agents.”


Comments

Vietnam's troubles take a toll on Chinese exporters

By Steve Toloken
News Editor / International

Published: November 1, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

Chemtrusion, Mytex Indiana compounding plant set for expansion

January 29, 2015 1:35 pm ET

Japanese and American partners in a compounding plant in Indiana plan to expand the facility.    More

Image

DuPont-Chenguang JV to produce fluoroelastomers in China

January 29, 2015 12:30 pm ET

DuPont Fluoropolymer Solutions and Zhonghao Chenguang Chemical Research Institute Co. Ltd. are proceeding with a 50-50 joint venture to serve the...    More

Image

Barington may force a vote for Omnova board at annual meeting

January 28, 2015 3:52 pm ET

It looks like the battle between Omnova Solutions and an activist investor is heading to a vote.    More

Image

PolyOne sees sales, earnings per share climb, profit decline

January 28, 2015 3:00 pm ET

North American compounding leader PolyOne Corp. posted record adjusted earnings per share in 2014, even as the firm's sales saw modest growth and its ...    More

Image

China XD to catch up on Sichuan project

January 28, 2015 2:41 pm ET

Automotive compounder China XD Plastics Co. Ltd. (Nasdaq: CXDC) has been working on its fourth production base in Nanchong, Sichuan province since 201...    More

Market Reports

Plastics in Automotive: Innovation & Emerging Trends

This special report newly released by PN and sponsored by The Conair Group examines current trends in the use of plastics in automotive, materials innovations and the changing landscape. It includes a review of legislative/regulatory activity impacting vehicle development and lightweighting, market opportunities & challenges for mold and toolmakers, innovative design strategies being implemented by major OEMs and suppliers, as well as a review of key indicators in Canada, Mexico, Brazil and China.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Upcoming Plastics News Events

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events