By Steve Toloken, Plastics News Staff
Guangzhou, China -- There's a lot of talk these days about how the economic rise of the BRIC nations - Brazil, Russia, India and China - is reshaping business. That came through loud and clear to me at the Taipei Plas show this month in Taiwan.
At the show I heard the same story over and over again: sales to the BRIC economies and other emerging markets in the Middle East, Africa and elsewhere are driving a solid economic recovery for Taiwan.
That's good for Taiwan's plastics machinery firms, and its mid-priced range of equipment, but what does it mean for North America, Western Europe or Japan?
I got back to my office in Guangzhou and looked at new data from the Japanese plastics industry, and it made me think the Taiwanese have a point.
Japan's injection moulding press makers sold 12 600 units in 2008, but the bottom fell out and they sold fewer than 5000 presses last year.
Sales revenue for Japanese press makers dropped more than 55 percent in 2009. Taiwan's machinery makers, meanwhile, said their sales "only" dropped 30 percent.
There's obviously not a lot of growth in the traditional markets. When I joined Plastics News in the late 1990s, the American injection press market was about 6000 machines a year. Last year, it was a miserable 1200.
Of course it will get better, and settle at some higher number. But what will be the "new normal"? 2500?
Some American firms have taken the approach of setting up production in high-growth areas. One of them, Thermoforming Systems llc, set up an Asian manufacturing partnership and said it's seeing rapid growth in emerging markets because it can meld its expertise with lower costs of making machinery in Taiwan.
Milacron Inc., as well, told me last year in India that their factory there saw strong sales in emerging markets like Africa, after it learned to modify its equipment and tailor its offerings.
What does it all mean? At the very least, you'd better dust of your emerging market strategy.
See a longer version of this story at www.plasticsnews.com
Toloken is Plastics News' Guangzhou, China-based Asia bureau chief.