Don't look now, but here comes 'Chindia'

Representatives of plastics industries from China and India met Feb. 3 in New Delhi, India on the eve of the opening day for the triennial Plastindia exhibition to openly discuss differences but also to consider the many options open to them for working together. The world's two most populous countries share two of its most buoyant plastics industries, and representatives of both countries' leading plastics trade groups were optimistic that even tough economic conditions could not slow the pace of integration between the two.

The Chinese Embassy's Peng Gang accepts a token of thanks while Plastindia Foundation's Amar Seth (left), VP, and Arvind Mehta (right) applaud.

One speaker went so far as to predict that "Chindia" ventures would become some of the industry's strongest processors in the coming years.  Although acknowledging that in the current economic turmoil their industries have not gone unscathed, leaders from both countries were solidly optimistic. Arvind Mehta, president of the Plastindia Foundation  (Mumbai), the umbrella organization for the country's industry and the organizer of the trade show, said of current market conditions, "It is India and China who hold a big advantage ... in the current (economic) situation." Liao Zhengpin, president of he CPPIA (China Plastics Processing Industry Association), said he hoped both countries' economic cooperation could go even further, noting, "The current financial crisis has severely impacted many countries. We must work together, complementary to each other, to help our industries." 

China sees in India a country where domestic plastics consumption is predicted to double in the next three years, albeit from its present low rate of 5-6kg/capita. India's real GDP growth rate exceeded 9% annually from 2005-2008 and, even this year, seems set to exceed 6%. China's government still has work to do to stoke its own population's spending habits, but the country's plastics industry had a deficit of about 20 million tonnes of resin for the period Jan-Oct 2008, and India's suppliers and compounders hope to help fill that gap. 

All is not cozy yet, with India's plastics processing community sometimes concerned that "India is flooded with Chinese plastics products," noted Ashok Goel, vice-chairman and managing director of Essel Propack, the world's largest processor of laminated thermoplastic tubes (and one of MPW's 'Spotlight' processors; see the story here) and the man who coined the "Chindia" term. But he too sees more opportunities than threats, for example via joint ventures between India and Chinese processors, which could offer Indian processors a close view of their much larger, and generally more efficient based on economies of scale, Chinese counterparts, whereas Chinese processors could benefit from India's fast-growing demand while also spreading their export risk away from North America and Europe. Goel noted the countries' processing industries have many similarities, with another on the way as India now is forming Special Economic Zones (SEZs) of the type long popular with manufacturers in China. He said that India's conversion costs, when considering labor and electricity, are equal to or possibly even below that of China's, where his company runs three processing facilities. Bilateral trade between the countries reached $51.7 billion last year, noted Peng Gang, economic and commercial counselor at the Chinese embassy in New Delhi, but only about $1 billion of that was in plastics. With the countries' governments expressing hopes to continue increasing their bilateral trade, and with processors in both keen to work together, it seems certain that "Chindian" processors will soon be a major factor on the processing landscape.—[email protected]