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July 11, 2016 02:00 AM

Dow targets thriving applications in Asia Pacific

Rebecca Kanthor
Correspondent
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    Rebecca Kanthor
    From left: Mark Saurin, Diego Donoso and Lawrence Cheng.

    Shanghai — Dow Chemical Co. is leveraging its global experience to introduce new products that are popular in other regions into the Asia Pacific market, company executives told Plastics News at Chinaplas in Shanghai earlier this year.

    As an example, the company has high hopes for flexible packaging, said Mark Saurin, commercial vice president for packaging and specialty plastics in Asia Pacific.

    “So something in Latin America may be relevant, [for example] rice packaging or sugar packaging, and we can bring [that] to these marketplaces in Asia as well,” he said.

    That benefits Dow and its clients, he said.

    “We work with multinational companies who want to participate here, but also [we] help the local brand owners make their packaging development more successful, raise the standards, and meet the expectation of the consumer in the markets.”

    The recent trend of flexible packaging replacing rigid containers is revolutionizing the Asia Pacific market, he said.

    “It started in Latin America. They use it for slightly different products in Latin America and Europe, but in Asia, we have applicability for oils and sauces,” Saurin said. “It's the way that we've been able to use the technology, bring it to the market, make it relevant, and then be able to effectively create a new market for flexible packaging in this region.”

    Each country in the Asia Pacific region has unique needs, he said.

    “We've been focusing on how we bring the right products for flexible packaging for each of those countries and each of those locations, as they move along a degree of sophistication scale. I think we've been very successful in the last 12 months, growing faster than the rates of GDP.”

    In the region as a whole, the focus has been on meeting the needs of the middle class. Lawrence Cheng, commercial director for packaging and specialty plastics for Greater China, said as the living standards rise, China's middle class has new requirements.

    “The China market has been evolving and transforming from the basic needs to much higher quality requirements,” he said. “There's a reason why we launched five different products this time [at Chinaplas]. New technology can breach the main gaps, and will be good for products with heavy-duty requirements,” he said. “We launched these products and made them tougher and thinner.”

    Each of Dow's new products in the Asia Pacific market is tied to a social trend, like aging population, the loosening of the one-child policy, and the growing popularity of e-commerce.

    “Our focus is on food packaging, industrial consumer packaging, and the health and hygiene market. They're all very relevant to things that continue to thrive in China,” Saurin said. “Concerns over food safety and food regulation means that better packaging solutions that keep food fresher are extremely relevant in that market.”

    Diego Donoso, business president of Dow's packaging and specialty plastics, said he can see the industry is clearly evolving in Asia.

    “You see people investing heavily in high-quality equipment, and very complex equipment. And with that complexity of equipment comes the specialization of the resins,” he explained.

    While China is a huge market, Saurin noted that India is set to be one of the largest markets for flexible packaging in the world. Dow is positioning itself to take advantage of the differences in the two markets.

    “I think that the needs for that market are slightly different, because the consumer [is] evolving differently. It's not going through the same urgency in some market segments, and some other market segments are still in an infancy stage,” he said. “Hygiene applications are an area where we're still seeing it [develop] very slow, but increasingly gathering momentum, whereas in China the hygiene market is much more sophisticated and developed. The agricultural industry is still developing in India in a very slow and infancy stage, but rapidly is going to take off. Again, China is more developed there,” he said.

    Dow is not feeling China's economic slowdown Cheung said. “In fact, we see the growth is much higher than GDP. In fact we run faster, so the opportunities are there.”

    Asia is moving ahead of the United States and Europe, Donoso said. That's because companies in Europe and North America “have to reinvest in equipment in a massive way. And to go into pouches, which is a lot more efficient and more sustainable, it's [a] very cumbersome [process] for them [to switch],” he said.

    “I think Asia has leapfrogged many of these applications going basically from no packaging straight into flexible packaging and pouch packaging, in a faster way. You go into some supermarkets in Asia, and in all the aisles, you don't see one bottle. You don't see anything rigid, everything is flexible,” he added.

    Donoso said Dow's strategy is to provide multiple solutions to each client so that the relationship is more of a long-term partnership. “That goal to market is when the customer looks at us, ‘Hey, I want a specialty resin for this,' and I have it. ‘I need an adhesive,' I have it. That way we talk the same language in a bigger way, rather than just selling it.”

    Midland, Mich.-based Dow has massive PE expansions under way in the Middle East, through its Sadara joint venture, and in Freeport, Texas. The projects are scheduled to be completed by 2017, and will showcase the best PE technologies that Dow has, Donoso said. The added capacity will help Dow more fully penetrate the market and get deeper into the packaging value chain.

    Saurin added: “Maybe 15 percent of the [China] market uses a more differentiated linear low density [PE] product, and the rest of it is a more commodity product. There was an increasing need for that percentage to be increased.

    “We see a much rosier picture of growth, going forward,” Saurin said.

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