TAGS: CHINAPLAS
China is estimated to garner a 2.3% growth year-over-year in 2020; and projected to reach 8.1% in 2021, according to the International Monetary Fund's (IMF) updated January 2021 economic outlook. The country rebounded more rapidly after the pandemic and re-opened gradually as early as April 2020.
The ASEAN is anticipated to reap the benefits from its trade ties with China, its largest trading partner since 2009.
Collaborations to Future-proof Regional Expansion
Starting in 2021, partnerships among the ASEAN countries, China, and other trading nations are expected to accelerate recovery in the region. Over time, growth will be driven by the digital transformation, the Fourth Industrial Revolution (4IR), and connectivity cooperation - all of which are underscored in different initiatives, namely, the ASEAN’s 2025 connectivity master plan (MPAC), the ASEAN-China Strategic Partnership Vision 2030, the Belt and Road Initiative (BRI), and the China-led Regional Comprehensive Economic Partnership (RCEP), to cite a few.
The China +1 strategy is also a promising route for the ASEAN-5 to foster more investments. Companies that adopt the China +1 with the ASEAN-5 countries can enjoy the dual benefits of doing business with China and the ASEAN-5.
The ASEAN-5’s participation in regional and international free trade agreements also allows investors to access global supply chains. Likewise, the region’s strategic geographical location meets the logistical needs of companies and offers the advantage of reducing production costs.
Meanwhile, for China’s BRI, the ASEAN is vital to its Maritime Silk Road, which will connect China to other trading economies in Southeast Asia, South Asia, the EMEA (Europe, Middle East and Africa), and the European regions. ASEAN’s participation in the BRI has witnessed a surge in infrastructure developments which facilitates trade and investments for the ASEAN countries, thereby improving their competence in the global market.
Restoring Growth Momentum in the Medical Devices Sector
While country lockdowns have caused several industries to push pause buttons, the medical technology sector has grown exponentially as demand for personal protective equipment (PPE), respirators, fans, test kits and other essential medical devices has increased and surpassed supply. Southeast Asia has benefited from its production capacity for PPE and medical devices. Digital healthcare readiness is another advantage. The emerging upper-income economies of countries like Thailand and Malaysia, for example, are both aiming to become the medical hubs of Asia.
In Thailand, medical devices are considered a high value sector. For this reason, the country has laid down the groundwork with enabling policies like tax incentives allowed by the country’s Board of Industry (BOI) for investment projects and the machines that they require, and on raw materials used in making exported products, and other duty exemptions. As well, the 10-year strategic plan spanning from 2016 to 2025 will cover four major areas – wellness, medical, academics, and products. This roadmap paves the way for developing a medical industry that is innovative and focused on research and development.
Malaysia boasts a strong distribution network via its 13 free industrial zones and other logistics channels. It also offers diverse medical technology ranging from surgical gloves, wound care, and other single-use devices to cardiac pacemakers, stents, orthopedic and imaging equipment. Malaysia is the world’s largest nitrile and latex rubber gloves producer, accounting for more than 60% of global supply. Domestic rubber glove makers and other emerging players have witnessed a growing demand for gloves during the Covid-19 pandemic and reaped the benefits from the growing global glove sector.
Race to Zero-Emissions in the Growing EV Markets
In the ASEAN, the growing momentum to reduce carbon emissions in the environment is setting the stage for the 650 million consumers in the region to switch to green technologies.
The adoption of electric vehicles (EVs), including hybrid electric vehicles (HEVs), touted to generate zero emissions, is being promoted to reduce the carbon impact of the transport sector.
In Southeast Asia, the manufacture of EVs is gaining traction. Indonesia, the second largest car producer in the region after Thailand, plans to begin producing EVs in 2022. By 2025, EVs and HEVs will make up 20% of total vehicle production in Indonesia, with the country having good prospects of becoming a regional EV manufacturing center by 2030.
Thailand is also expanding its EV industry. The Thailand government has established the National Electric Vehicle Policy Committee (NEVPC) that oversees the national EV roadmap targeting to produce 1.2 million EVs by 2035.
Vietnam is also making inroads in its EV production with the launch of three locally produced smart battery-electric SUVs in January 2021, which are expected to debut in the US market in 2022.
Packaging Demands for Sustainability
The rising opportunity in the food delivery sector and home delivery of consumer goods has presented growth opportunities for the packaging sector. The current increase in online shopping and home delivery activities has not only led to a demand for packaging but has also changed consumer preferences for packaging.
A Euromonitor report examined the impact of Covid-19 on the Malaysian packaging industries and concluded that revenues were hit by the decline in consumer spending. In Malaysia, containment measures limited economic activities leading to below-normal purchases of packaged retail goods. On another note, consumer preferences may change in post-pandemic years.
In the Philippines, the packaging market is projected to grow 3.3% to 69 billion units annually by 2024, according to GlobalData. The growth is mainly driven by the rigid packaging segment, estimated to present a CAGR of 6.4% between 2019 and 2024.
In Vietnam, online shopping and home delivery during the Covid-19 lockdown have promoted the preference for larger packs and multipacks to prioritize safety. GlobalData forecasted Vietnam’s e-commerce activity had surged by 30.3% to US$13.1 billion during 2020. Relatedly, Vietnam is due to ban single-use plastics from convenience stores and supermarkets by 2021. This move, along with the ban on imported scraps by 2025, is aimed at increasing recycling rates of municipal waste to 90%.
As a result, the industry is seeking continued development of recyclable materials and sustainable technologies that can enable manufacturers to use fewer plastics without compromising the quality of the packaged product.
Recovery Strategies: Scouting for New Markets in Post-Pandemic Era
The pandemic has been a crucial test of Southeast Asia's advantage as a sustainable market and regional supply chain. The ASEAN’s diverse markets and industry specialization offer growth opportunities for companies seeking to regain momentum in a disrupted global economy.
To grasp the opportunities generated during this recovery period, ASEAN visitors from manufacturing sectors prospecting new avenues for business growth and market expansion are invited to attend the upcoming CHINAPLAS 2021, to be held during April 13-16 at Shenzhen World Exhibition & Convention Centre.
CHINAPLAS: Beyond a Physical Exhibition
CHINAPLAS will not only showcase technological innovations on the fairground, but will also go beyond a physical exhibition to the online world! One of the flagship services is “Live Streaming”, bringing exhibitor interviews, exhibits close-up, guided tours, on-site events, etc., collectively to the official online video channel for buyers all over the world. “Live Streaming” could be the handiest alternative for buyers who cannot visit the show due to the epidemic.
Source: Chinaplas