Tremendous potential for ETP in China as automotive and electronic sectors expand manufacturing

The last few years have witnessed a strong growth in automotive and electronics sector in China. Extremely good growth has been omnipresent in the areas of automobiles and electronic/electric business machines.

In the past decade, overall economic growth has been more than 8-10%, leading to large scale expansion of manufacturing base. Global production capacities lead to higher plastics demand, not only for commodity grades like Polyolefins, Vinyls and Styrenics but also in the areas of Engineering Thermo Plastics (ETP). Growth in commodity plastics have slowed down to about 10% in the last few years while ETPs have started growing at almost 15-20% in the last 5-10 years. PolyAmides, Polycarbonates, PBT and POM are showing good growth potential, mainly due to the continuous development of indegenous moulding capability to meet local requirement.

China has very fragmented and small-sized compounders who are still to develop technical skills. Inadequate technology to meet the stringent international requirements of its vendors makes China dependent on imports of ETP. Until recently, most of the big international players like Bayer, Dupont, and GE Plastics were concentrating their manufacturing activities in North America and Western Europe because of the well developed markets. However, these players are increasingly investing in developing newer capacities in China to take advantage of the growing market. It is estimated that almost 75% of imports of ETP in the beginning of 2000 will drop to about 30% by the end of this decade. Of course, the total import quantity in absolute terms will increase due to growth of ETP by an average of 15% every year.

No wonder that most of the important international players have established good facilities in China. However, some good Chinese compounders (almost 25-50) from the total of more than 1000 would acquire the technology and provide competition to these international players.

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