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

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
Staff Reporter / Asia Bureau Chief

Published: November 1, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

New Hexcel plant will supply carbon fiber for Airbus A350 XWB

September 30, 2014 2:43 pm ET

Hexcel Corp. is investing $250 million on a new carbon fiber plant in France, with part of the production going into the future Airbus SAS A350 XWB.    More

Image

LyondellBasell CEO Gallogly to retire

September 30, 2014 3:00 pm ET

James Gallogly, CEO of Houston-based polyolefins producer LyondellBasell Industries NV, on Sept. 29 announced plans to retire in 2015.    More

Image

Audacious vandal stuns Taipei Plas

September 29, 2014 4:59 pm ET

Melodrama erupted at the traditionally tranquil Taipei Plas trade show on Sept. 28 when a mysterious intruder flung red paint at the Baumüller...    More

Image

Asahi Kasei breaks ground on Alabama compounding plant

September 29, 2014 5:39 pm ET

Asahi Kasei Plastics North America will be able to solve two problems at once with a new compounding plant in Athens, Ala.    More

Image

Shini pushes into western China

September 29, 2014 4:28 pm ET

Despite intellectual-property brigands, Taiwan's Shini Plastics Technologies Inc. is zestfully pursuing the enormous Chinese market for plastics auxil...    More

Market Reports

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our industry analysis highlights macro industry trends and micro trends faced by companies that do business in Mexico. The report also provides key industry statistics and forecasts to anticipate future industry expansion.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

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