Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Videos
    • Podcasts
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Notable Leaders in Sustainability
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics Caps + Closures: A Global Online Event
    • Women Breaking the Mold Networking Forum
    • Bioplastics Live
    • Numbers that Matter Live
    • PFAS Live
    • Plastics in Politics Live
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Resin Prices Overview
    • Commodity Thermoplastics
    • High Temperature Thermoplastics
    • Engineering Thermoplastics
    • Recycled Plastics
    • Thermosets
    • Europe - Virgin
    • Europe - Recycled
    • Europe - Feedstock
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
March 16, 2009 02:00 AM

East rising: Industry shift toward Asia continues

Steve Toloken
Assistant Managing Editor
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Trying to predict where plastics will be made and molded in 20 years is as much guesswork as hard analysis, but if present trends continue, then plastics seems headed east — toward low-cost labor hot spots.

    In the case of the resin industry, analysts said most new investment is going to the Middle East, where there's cheap oil and gas feedstocks, and into Asia, where the new demand will be.

    “Most of the new construction of base chemicals and plastics is occurring in the Middle East because of the low cost, and it's also occurring in Asia and India because of the strong demand and consumption,” said Howard Rappaport, global plastics business director for Chemical Market Associates Inc. in Houston.

    Plastics consumption is growing rapidly in developing countries, much faster than in developed economies. Consider these figures:

    * China, the single-largest plastics consumer, is expected to grow from 72 billion pounds of polyethylene, polypropylene and PVC in 2007 to 113.8 billion pounds in 2012.

    * India's consumption will more than double during that period, from 11.9 billion pounds to 25.4 billion pounds, as it jumps from the word's fifth- to fourth-largest plastic market, according to data from petrochemicals firm Reliance Industries Ltd. of Mumbai.

    * According to Reliance, the European Union, the United States and Japan, which round out the top five plastics markets, are expected to add between 1.3 billion and 6.6 billion pounds each. The EU will remain as the second-largest global market for plastics, consuming about 68.3 billion pounds in 2012.

    New Zealand-based analyst Roger Young, vice president for Asia Pacific with Akron, Ohio-based Robert Eller Associates Inc., said the big names in resin 20 years ago were overwhelmingly American, European and Japanese. Today, the field includes entrants from China such as Sinopec and PetroChina Co. Ltd., along with India's Reliance, and Saudi Basic Industries Corp. of Saudi Arabia.

    Plastics machinery is showing similar trends. The largest injection molding machine maker in the world today by number of units is China's Ningbo Haitian Group Ltd., which likely wasn't on anyone's list of companies to watch 20 years ago.

    In plastics processing, Young suggests, Africa could be such an unlikely future prospect: “I would expect the Africa option to be active 15-20 years in the future. We are seeing companies already beginning to look at Africa as a future site.”

    He said that Africa will be last in a long line of development areas, as costs rise in the relatively developed regions of coastal China, and as labor- and cost-sensitive manufacturing shifts to places like Eastern and Central Europe, central China, Vietnam and India.

    Those spots will retain some advantages: Eastern Europe, for example, is favored over China for production of products with more sensitive intellectual property requirements, Young said.

    Russia could emerge as a major resin producer in 15-20 years, the time it will take to make the massive investments needed to build petrochemical facilities and related infrastructure, Rappaport said Feb. 5 during the PlastIndia show in New Delhi. “[Russia has] a tremendous amount of oil and gas reserves,” he said.

    Logistics issues could help the Middle East develop as a low-cost manufacturing center, and could cause Mexico's resurgence as a manufacturing locale for products geared toward North America. “A lot of it depends on the availability of the material, the price of the resin and the infrastructure and ability to ship the finished goods,” Rappaport said. “Not all finished goods travel well. It's limited to the finished goods you can stuff economically in a seagoing container.”

    Helmar Franz, Haitian Group's executive vice president, said the prediction business is notoriously difficult. Understanding where plastics will be in 20 years requires putting the industry in the context of larger geopolitical issues.

    In the past, the world talked a lot about overpopulation, but now it's focused on environmental and energy issues, which heavily influence industry's direction, Franz said. The top issues in 10-20 years, such as access to water supplies, may be tougher to spot now, he said.

    Despite the changes, North America and Europe will remain big markets, and many products, for a variety of reasons, must be made locally, analysts said.

    Young said that precision products with high-quality or regulatory requirements, such as medical devices, will continue to be made largely in places like North America, as will goods with high shipping costs such as appliances and foamed products — particularly as governments try to cut carbon emissions as they fight global warming.

    Young said original equipment manufacturers will keep pushing into lower-cost countries, but increasingly will settle in China and India to serve those local markets with populations of more than 1 billion people.

    Automotive and electronics will remain strong in China, because those industries upgrade and rely less on cheap labor, he said. But he mentioned the ABS resin industry as a segment where industry leadership is moving from the West to Asia.

    “Western companies will arrogantly tell you that their resins are of much higher quality,” Young said.

    “[That's] probably true, but if the market does not demand that quality, what good will it do them? As the Asian companies get more and more experience, they are improving their technology and products.”

    RECOMMENDED FOR YOU
    Auto suppliers plan for uncertainty amid UAW strike, shift to EVs
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    An 8,000-ton dream for Milacron, 20/20 Custom Molded Plastics
    2
    Proposed tax on single-use virgin plastic resurfaces in Congress
    3
    Is the market getting serious about using recycled plastics?
    4
    Feedstock costs continue pushing up PET bottle resin prices
    5
    Reduced supply, rising oil costs lead to boost in recycled PET resin prices
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Find more newsletters at plasticsnews.com/newsletters.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Notable Leaders in Sustainability
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Videos
      • Podcasts
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics Caps + Closures: A Global Online Event
        • Women Breaking the Mold Networking Forum
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
      • Editorial Livestreams
        • Bioplastics Live
        • Numbers that Matter Live
        • PFAS Live
        • Plastics in Politics Live
        • PN Live: Mergers and Acquisitions
        • Polymer Points Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Resin Prices Overview
      • Commodity Thermoplastics
      • High Temperature Thermoplastics
      • Engineering Thermoplastics
      • Recycled Plastics
      • Thermosets
      • Europe - Virgin
      • Europe - Recycled
      • Europe - Feedstock
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified