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.”