MAKATI, PHILIPPINES - The Philippine plastics industry, dominated by small and medium-sized extrusion and molding companies, will get a big boost with the proposed Plastics Research and Development Unit under the Industrial Technology Development Institute. The domestic plastics industry lacks adequate national technology sources for formulation and processing, design of products and molds, and the development of new products and applications, according to a study by Rambol, Hannemann & Hojlund AS, a consulting firm in Copenhagen, Denmark.
RH&H, commissioned by the Development Bank of the Philippines to undertake the study, said the planned plastics research unit in Makati and the Philippines Packaging Center in Manila, now under implementation, together can become the main instrument of institutional support in terms of research and development, testing and standardization, training and industrial information.
The study recommended that some US$2 million be allocated by the Philippine government as grant assistance to carry out the proposed research unit. In turn, the government will seek bilateral or multilateral aid for meeting the fund requirement.
While DBP may serve as the implementing agency for the linkage feasibility studies, the product source directory may be implemented through the proposed research unit and the packaging center.
The study also recommended that the plastics industry should set apart a minimum of US$5 million per year for 10 years toward using the services of these two institutions.
The local plastics industry acquires technology, patents, trademarks, etc., abroad for manufacturing products. And there exists practically no quality control in the factories to comply with external rules and specifications, the study said.
According to the study, the development of new products, applications and markets is haphazard, and most plastics manufacturers have no access to an adequate information service.
Industry is expected to benefit from an expedited system of banking, finance and trade initiated by the current Philippine government. The study also recommended the immediate abolition of the tariffs on imported plastics-related raw materials, equipment and machinery and other connected items.
The domestic market is the main market for the plastic industry, which has about 280 registered companies, employing 20,000 workers. The main products offered are polybags, PVC pipes, industrial crates, bottles and housewares.
A large number of these firms are members of the Philippine Plastics Industrial Association Inc., which has about 200 members.
Of the 280 enterprises in the plastics industry, 140 have fewer than 10 employees. In 1992, the estimated consumption of plastic raw materials in the domestic industry was 661 million pounds with an average capacity utilization rate of about 50 percent.
While the domestic market is the main market for local plastic products, there are some indirect exports through products from the textile industry, the electronics industry, and the food industry including products like packaging and subcomponents.
Industry analysts noted an increasing demand for housewares, pipes and crates due to the increasing domestic purchasing power in the Philippines. The domestic economy posted a 5.2 percent growth in 1994 and is projected to grow at 6.5 percent by the end of 1995.
Exports of plastic products grew by 32 percent from 1986-1990. For miscellaneous plastic products, main export markets are the United States, Japan, Malaysia and Thailand.
The major markets for plastic packaging containers and lids are the United States, United Kingdom, the Netherlands and Australia. Both the product groups have shown a positive trend, especially in the most important and biggest market, the United States.
