Tough conditions in South Korea's plastics market this year are pushing small molder and mold-making firm Kaesung Co. Ltd. to venture far away to new markets in Russia and the Middle East.
``This year is very difficult for manufacturers in Korea, because of high material prices and because many big Korean companies have moved their factories overseas,'' said Lee Young, president of the Bucheon-based firm. ``Maybe this is one of the worst years.''
Lee said he's targeting those markets and venturing to trade shows there because high oil prices have fueled economic growth in those oil-rich countries.
Kaesung, which has about 20 injection presses in factories in Bucheon and Ningbo, China, is not alone. Other industry officials interviewed at the KoPlas Korea International Plastics and Rubber Show, held March 26-30 in Seoul, said the industry is being squeezed.
You Won Joon, managing director of the Korea Plastics Processing Machinery Industry Cooperative in Seoul, said the industry is hurting because of problems in the world economy, particularly the United States, and because Chinese competitors are becoming much more active and are very price competitive with Korean firms.
He said the country's domestic equipment makers, for example, manufacture half the number of injection molding machines they once did in Korea.
Until a few years ago, Korea's industry made about 10,000 molding machines a year, but that number has dropped to 5,000, he said. Some of that production has shifted to Korean-owned factories China, but the industry is still having problems, he said.
``The Korean plastics processing industry is not good,'' You said, speaking through an interpreter provided by KPPMIC.
He said the Korean machinery industry should invest in improving its technology and in making large-tonnage presses for the automobile market, and try to raise the amount of plastic in cars from the roughly 25 percent currently used.
Korean firms also should try to raise their maximum press size from 4,000 tons to 5,000 tons, he said.
Korea's second-biggest press maker, Woojin Selex Co. Ltd., started focusing on making bigger presses for the automotive market three years ago, and wants to target auto and home appliance production, said spokesman Jerry Kang.
Woojin, based in Incheon, used the KoPlas show to introduce several new machines, including its biggest electric press, with 280 tons of clamping force, along with a 1,800-ton two-platen hybrid for the auto and liquid crystal display TV industries, and a 170-ton energy-saving model.
Korea has traditionally been a production base for mobile phones and small consumer electronics, but industry officials said some of that has migrated from Korea to cheaper spots like China and Vietnam.
Competitor Sunwoo Heavy Industries, in Cheonan, also said it sees opportunities in large injection presses.
``Nobody knows the future, but I expect [the market for] big-sized machines will get better and better,'' said Managing Director Choo Yung-Sa.
But other companies interviewed, particularly some Japanese firms, said they are seeing strong demand in Korea for more expensive higher-technology equipment like electric presses, suggesting that problems there may be more concentrated in lower-end manufacturing.
Japanese injection molding machine manufacturer Sumitomo Heavy Industries, for example, sold 230 Japanese-made electrics in Korea in 2007, up from 180 the year before, said Takahashi Shigenao, president of SHI Plastics Machinery (Korea) Co. Ltd., based in Seoul.
Japanese firm Nissei Plastic Industrial Co. Ltd. echoed that, reporting sales of electrics and hybrid machines in Korea climbed by 20 percent in 2007, to 180 machines.
And press maker Engel in April is formally launching its Korean-made all-electric e-Max presses from its factory in Pyeongtaek, to challenge more expensive Japanese imports, said Ko Jae-Bum, manager of export marketing for Engel Korea.
Others were in Korea scouting for cost-effective technology.
A delegation of 20 people from India came to KoPlas looking for better technology than what is available in their country. They said they see Korea as a source of ``cost-effective'' equipment that can be 30 percent cheaper than European machines, said Arvind Mehta, president of the PlastIndia Foundation in Mumbai.