K 2016 Focus On ASEAN Plastics Industry

The 10-member group of Southeast Asian countries exported $39.3 billion in plastics and plastic products in 2013.

ASEAN (Association of Southeast Asian Nation), which is comprised of Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia, has a combined population of over 600 million and a total GDP of $2.6 trillion, according to a report from K 2016 organizer, Messe Düsseldorf.

More than 95% of the region’s GDP is generated by the so-called ASEAN-6: Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

Vietnam: This country’s plastics industry enjoyed average annual growth of 16-18% between 2010 and 2015. Packaging is the largest market, accounting for 37.4% of output, followed by consumer goods (27%), construction (18%) and technical products (15%). The country is working to move up the value chain as today the majority of its exports are plastic bags bound for Japan. It also relies heavily on imported raw materials, bringing in an average of 4 million tons of raw materials with domestic production of only 1 million tons.

Indonesia: With a population of over 250 million, Indonesia’s government has increased efforts to industrialize and develop the nation towards becoming the world’s seventh largest economy by 2030, according to Messe Düsseldorf. Its middle class is expected to double to 141 million people within the next five years, further driving plastics consumption. According to the Indonesian Packaging Association, food packaging accounts for 70% of plastic consumption.

Malaysia: Malaysia has more than 1500 plastic production companies that export to Europe, China, Singapore, Japan, and Thailand. The packaging sector accounts for 45% of total plastic consumption, followed by electronics (26%), automotive (10%) and the construction industry (8%).

Thailand: Thailand’s plastic consumption is led by packaging (48%), electronics (15%), construction (14%), and automotive (8%). Its automotive sector attracts manufacturing opportunities, although its overall cost index is 20-25 % higher than Indonesia, Vietnam and the Philippines. Thailand has also invested $60 million into bioplastics development over the past seven years, with the government supplying 80% of the funding.

Philippines: The Philippines exports weakened recently, dropping 5.8% due to low demand from its top buyers: the U.S., China and Japan. The semiconductor and electronics industries account for the majority of the country’s exports. Various measures are being instituted to boost exports, such as the Generalised Scheme of Preferences (GSP) of the European Union (EU), which creates lower or no duties on exports to the EU.

Singapore: Singapore has become a chemicals power, with around 95 companies represented on Jurong Island and attracting investments in excess of $25 billion, according to the Economic Development Board. Companies like BASF, ExxonMobil Chemical, Lanxess, Mitsui Chemicals, Shell and Sumitomo Chemicals all have plants in Singapore. The country is expected to slowdown in 2016, along with a struggling Chinese market and regional oversupply.