Busan, Korea - "Because of the increasing uncertainties in the world, buffers at all points in the value chain will do the job of dampening the disturbances," said Rahul Gautam, chairman of the Indian Polyurethane Association.
For the Asian PU industry, Gautam suggested, there are steps that can be taken to prevent slumps in other countries having a knock-on effect in regions such as India, in an increasingly global economy.
In a 1 June presentation to the second International PU Forum organised by the Korean Polyurethane Society, in Busan, South Korea, Gautam stressed the need for a unified economic grouping in Asia, which he said "cannot remain just a vision, but must develop further than ASEAN and EAFTA." [These are the existing trade groups -- the Association of South East Asian Nations and the East Asia Free Trade Zone].
He also made a plea for stronger government lobbying by the industry associations, for the developing countries to share technology widely, and for the associations to promote intra-regional trade through events such as exhibitions, seminars and delegations.
Listing reasons for the effect of the recent downturn on the Asian PU market, Gautam said these include lack of integration of economies, Asian connections to Europe/North America, rather than intra-Asian connectivity, unchecked rapid growth, export-dependent economies and "wild fluctuations in raw material prices."
For Asia, Gautam, who is also managing director of India's largest flexible foam maker SheelaFoam, suggested that ways to avoid being damaged by a crisis in the West, for example, might include creating new sources of economic growth, regional economic cooperation, and Asia investing internally rather than externally.
Other helpful activities suggested by the IPUA chairman include investment in chemical plants in Asia Pacific by the raw material majors: "It has the double impact of improving availability and decreasing cost/price," he noted.
And his final recommendation for raw material suppliers must resonate with polyurethane processors worldwide: "Ensure price stability." Gautam said if prices were stable over reasonable periods of time, and not changing weekly, this would "allow businesses to focus on longer-term investment and return options."
Gautam's recommendations in the final session of the conference precede a one-day meeting on Wednesday 2 June in Busan of representatives of regional polyurethane associations from around the world to, discuss fruitful areas they might cooperate in: his suggestions may provide many topics for such an international dialogue.