Italian government's money troubles shrink delegation to Thai trade show

BANGKOK, THAILAND (Aug. 31, 2 p.m. ET) — Italy's financial problems are having an impact on plastics machinery suppliers.

Most of the large delegation of Italian plastics firms that had planned to attend Thailand's Tiprex trade show pulled out after Italy canceled government subsidies that help defray exhibition costs.

About 10 Italian firms had planned on exhibiting, but a last-minute decision by the Italian government to remove financial support for the group meant that only three companies decided to attend the Thai International Plastics and Rubber Exhibition, which runs from Aug. 31 to Sept. 3 in Bangkok.

“We would have had big participation from Italy this time around, but because of the austerity measures they had to cut at the last minute,” said Gernot Ringling, managing director of Messe Dusseldorf Asia Pte. Ltd., which organizes the Tiprex show in partnership with two Thai plastics industry groups.

Ringling, who is based in the German company's Singapore office, said only three of the 10 Italian firms that had signed up to exhibit actually attended, and his account was confirmed by one of the Italian firms that still made the trip — extruder manufacturer Bausano & Figli SpA.

“Two years ago [at the last Tiprex show], there was quite a lot of Italian exhibitors,” said Malcolm Kaye, the Bangkok-based agent for Bausano, in an interview at the company's booth.

He estimated that 15-20 Italian firms exhibited at the 2009 Tiprex show, along with a strong presence from the Italian trade commission.

Kaye said in the past, the Italian government paid 50 percent of the cost of booth space for its companies.

Italian pavilions have typically been a presence at some trade shows in Asia. It was not immediately clear if the government's decision applies only to the Tiprex show, or other trade fairs.

A phone call and an email to the Bangkok office of the Italian Trade Commission was not returned. Several Italian exhibitors said the head of the ITC office in Bangkok, Vincenzo Cali, visited them at the show.

Some Italian firms at the show said larger cuts appeared to be ahead for the government's trade support functions.

Kaye believes smaller shows like Tiprex can be more cost-effective than large, expensive trade fairs like Germany's K Fair, which also is operated by Messe Dusseldorf.

But he also said that if the market is strong, the subsidy should not matter much as companies will come with or without the government help. The government did not help with travel costs, he said.

Southeast Asia is a promising market for Bausano's newer, more technology-intensive applications like extrusion lines for wood-plastic composites, but it's challenging for Italian firms to compete against lower cost Chinese machines for standard, “bread and butter lines,” Kaye said.

Another Bausano manager said the company has some large customers in Southeast Asia, and has been doing business in the region a long time.

“If you don't come, people will think you have closed down,” said Aldo Basile, area manager in the Torino-based company's export division.

[Several other countries exhibiting with national pavilions at the Thai show said they provided similar support toward booth costs, and planned to continue doing so.

“We want our companies to go to Asia, we want to support exports,” said Christian Kiene, project manager with Advantage Austria's pavilion at Tiprex. The Austrian government has no plans to reduce that support, he said.

Austria pays 50 percent of the booth costs for companies in its pavilions for trade shows in Asia, and 40 percent for trade shows in Europe, Kiene said.

The Austrian pavilion of eight companies occupied a prominent spot at the front of the hall, and gave visitors a 16-page full-color brochure describing the products for the exhibiting companies.

Singapore's government, as well, provides between 30-70 percent of the booth cost for the firms who choose to exhibit at its national pavilions, said Low Lee Yong, executive director of the Singapore Plastics Industry Association.

Singapore, a city-state of five million people, is a small economy, so the government wants to encourage its small and medium-sized companies to go to international markets, she said.

The definition of who can participate in a national pavilion does seem at times to be broad.

Some firms in Singapore's pavilion, for example, were headquartered elsewhere but using their Singapore offices, such as Italian auxiliary equipment supplier Piovan SpA.