This IMM International Molding Report is prepared for IMM by Agostino von Hassell of The Repton Group, who provides IMM's monthly Molders Economic Index.

A review of the many trade statistics available from the United States Government reveals that two markets have emerged as attractive growth targets for U.S. molders: telecommunications equipment and building and construction products.

Obviously there are many additional export growth markets, but these two are somewhat unusual. In both markets the same pattern of growth exists, even though one-telecom-can be considered to relate to precision and value-added parts while the second market-construction-is more of a commodity market. This contrast just makes more clearly the point that there are export opportunities regardless of which type of market you currently serve.

Telecommunications
In this report we highlight the specific export opportunities presented to you by Brazil, Italy, and Indonesia. There are other countries where export growth can be found. Germany, for instance, with a recently deregulated telecom industry, is a $50 billion market growing at a rate of almost 7 percent/year.

United States exports to that market-still less than $450 million/year-are likely to grow at a rapid 10 percent/year clip for the immediate future. But these three countries offer generous opportunities worth exploring.

Italy. Total imports of telecommunication equipment into Italy have accounted for 25 to 31 percent of the market every year since 1993. U.S. imports accounted for roughly half of the total Italian imports market.

While competition for that market is increasing, U.S. suppliers of high-quality mobile communications equipment, switching and transmission equipment, and data communications and satellite communications equipment are poised for fast growth. In 1999 we estimate that almost $980 million worth of such equipment was imported into Italy from the U.S.

How much of that total is represented by molded parts? Applying a formula developed for the U.S. electronics market, we believe that injection molded parts-which hold each one of these devices together and make them functional-account for about 33 percent of the total.

Brazil. The largest economy in South America is another boom market for U.S. exporters. Almost $700 million worth of telecommunications equipment was shipped in 1999 from the U.S. to Brazil; nearly $200 million of this amount represents molded plastic products including housings for cellphones and switching devices, key boards, and connectors. We anticipate these exports to grow at a very rapid 14 percent/year rate for the next five years. What prompts such growth is that the domestic industry in Brazil is still sluggish, while at the same time the government is making serious efforts both to deregulate and to open up the market.

Indonesia. This country is still somewhat of a basket case after having been hit with both social unrest and the worst case of the Asian flu. Yet it is a surprisingly attractive export destination for U.S. telecom products. We estimate, based on partial data, that the entire Indonesian market for U.S. telecom products reached or exceeded $155 million in 1999; about 50 million of that consists of molded products. The United States holds a significant total market share in Indonesia. As that economy recovers, U.S. suppliers are likely to benefit the most.

Building and Construction
We started looking at this market segment in terms of exports when we received a call from a Georgia-based molder of building parts (hinges, connectors, and window frame parts) who said that exports now constitute almost 17 percent of his company's business.

Spain. With just $3.5 million in such exports from the United States, Spain is still an interesting example. It appears that just three U.S. molders account for almost this entire trade, selling plated faucet parts to Spain. We did speak with two of those molders who told us that they anticipate significantly expanding sales to Spain in the year to come with additional construction products.

Turkey. A far larger and more attractive market for U.S. molders in the construction market is Turkey, which accounted for almost $155 million in imports from the United States in 1999. The U.S. Commerce Department projects that this export opportunity will grow an average of 25 percent/year for the next few years. And what's even more surprising is that the majority of this $155 million are injection molded items or products containing a very large number of injection molded parts. Components for heating and air-conditioning systems, light fixtures, and bathroom appliances and parts are the majority of such exports that are imported from the United States.

Indonesia. Right now a solid export opportunity exists here for U.S. molders serving the construction market. But this is about to change with much more growth projected. Indonesia, the fourth most populous country in the world, is generally anticipated to resume economic growth rates of 7.5 percent/year or more. This will bring with it a return of the construction boom for both residential and institutional buildings. The U.S. Commerce Department projects a "burgeoning" market for sanitary fixtures, plumbing, heating, lighting fixtures, and fittings imported from the United States. In 1996 the U.S. exported $75 million worth of such products to Indonesia; this could very well grow to $300 million by 2005.