Taiwan machinery firms see growing demand in Africa

By Steve Toloken
News Editor / International

Published: August 12, 2013 9:57 am ET
Updated: August 12, 2013 10:01 am ET

Image By: Steve Toloken Peter Pan, R&D director with Chumpower

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Topics Africa China Packaging Machinery
Companies & Associations

TAICHUNG, TAIWAN — Some companies in Taiwan's plastics machinery industry, which are often among the first to go into the newest "emerging" markets, are reporting significant increases in shipments to Africa.

Packaging seems to be a big driver. The continent, for example, now makes up 16 percent of sales for PET stretch blow molding machine maker Chumpower Machinery Corp., up from less than 5 percent five years ago.

Similarly, injection press maker Chuan Lih Fa Machinery Works Co. Ltd. said orders to Africa are growing by double-digit percentages annually.

And blow molding and extrusion equipment manufacturer Fong Kee International Machinery Co. Ltd. said it exported a little more than 10 percent of its $34 million in global sales to Africa last year, up from 3-4 percent of sales in 2011, and less before that. FKI executives predict that 10 percent figure will grow.

To put African sales in perspective, it remains much smaller than the traditional destinations for Taiwan's plastics equipment, China and Southeast Asia.

But during recent interviews at their factories in Taiwan, executives from several companies pointed to recent signs of robust African demand for plastics equipment.

Multinational cosmetics manufacturers are starting to invest, and that's creating needs in their supply chains for Fong Kee equipment, said Charles Wei, CEO of the Tainan, Taiwan-based firm. Demand is also rising for blow molding machines for larger containers such as jerry cans for fuel, he said.

"I think in the next five years many big companies will move into Africa," he said.

Peter Pan, R&D director with Chumpower, said they believe they're winning orders partly because African factories are shifting their business from mainland China factories.

"Right now, the customers in Africa, they want more reliable products," said Pan, in an interview at the firm's headquarters in Taichung. "They don't want to spend money to buy European machines. So they come to Taiwan and Korea to buy machines."

Africa is a significant focus of Chumpower's marketing. Beyond exhibiting at the world's largest plastics shows this year, Chinaplas and K in Germany, the company is exhibiting at shows in South Africa and Libya, and is planning for a trade show in Kenya next year.

In general, its sales to Africa have been spread fairly evenly, with Nigeria, Algeria, Tanzania and Ghana all accounting for at least 10 percent of sales to the continent, according to the company.

Chumpower engineer Tony Wu, who travels widely for the firm, including trips to Africa, the Middle East and one to North Korea, said he does not see signs of a slowdown among customers in many of the firm's emerging markets.

"I don't see the slowdown, when I travel there; if anything they are still growing," he said.

If you look at Taiwanese plastics and rubber machinery industry export data, Africa remains a small portion of sales, but exports to Nigeria increased 19 percent last year, and tripled to Algeria, albeit from a small base.

Taiwan, with 22 million people, has a very dense collection of plastics manufacturers and claims it's among the top five plastics and rubber machinery exporters worldwide.

The love for Africa is not universal among Taiwanese companies.

Fu Chun Shin Machinery Manufacture Co. Ltd., Taiwan's largest injection press maker, with annual sales of about US$100 million, said it sees potential but the market may not be there yet in a big way for its equipment.

"They have lots of people, yes, but their industrial development is not very full range," John Hsieh, an executive with the Tainan-based firm. "We found we have a chance but … we should say the African industry is not ready yet."


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Taiwan machinery firms see growing demand in Africa

By Steve Toloken
News Editor / International

Published: August 12, 2013 9:57 am ET
Updated: August 12, 2013 10:01 am ET

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