Vietnam's troubles take a toll on Chinese exporters

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: November 1, 2012 6:00 am ET

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
Staff Reporter / Asia Bureau Chief

Published: November 1, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Negri Bossi's new owners may 'bring significant manufacturing' to US

April 16, 2014 1:09 pm ET

Italian plastics equipment major Negri Bossi may “bring significant manufacturing of injection molding machines back to the United...    More

Indorama's purchase of Sasa to give wider access to multiple markets

April 16, 2014 10:07 am ET

PET maker Indorama Ventures Public Co. Ltd. is expanding in Turkey with the acquisition of a majority of Sasa Polyester Sanayi.    More

Axiall resumes operations at damaged Lake Charles PVC feedstock plant

April 15, 2014 4:41 pm ET

Axiall Corp. has resumed operations at its PVC feedstock plant that was damaged by a fire in December.
More

Image

Power failure shuts down two PE resin units in Texas

April 15, 2014 3:35 pm ET

Two polyethylene resin units operated by Chevron Phillips Chemical Co. LP in Baytown, Texas, were closed from April 8-11 because of a power failure.    More

Shell Chemical to host public meetings to discuss plans in Pennsylvania

April 15, 2014 3:27 pm ET

Shell Chemical LP will host two public meetings on April 16 to discuss the possibility of building a major petrochemicals plant in the Pittsburgh area...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report provides analysis and discussions of economic and political conditions, market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as strategies being implemented by thermoformed packaging companies. In addition, there are reviews of 25 leading thermoformers in the packaging segment, assessing their growth initiatives and performance metrics over 10 years.

Learn more

Automotive Market Review and Outlook 2014 The Americas

This 75-page report features in-depth analysis of the automotive industry for the Americas. It includes discussions of market trends, legislative/regulatory activity impacting production and threats as well as design strategies being implemented by the major automakers. Detailed charts and data tables outline North American automotive production over the last five years.

Learn more

Plastics Building & Construction Market Review and Outlook 2014 with MS Excel chart data

This report provides in-depth analysis of the plastic building and construction market for North America, including discussions of trends, opportunities, threats and the latest developments in construction trends that impact plastics processors.

Learn more

Upcoming Plastics News Events

May 6, 2014 - May 8, 2014Plastics in Medical Devices 2014

May 12, 2014 - May 12, 2014Plastics News Brazil Pharma Summit

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

February 3, 2015 - February 7, 2015Plastics News Executive Forum 2015

More Events