Chinaplas 2011: BPF Market overview

The BPF attended Chinaplas in Guangzhou, May17th – 20th, with a group of 11 exhibitors and a mission of a further eight companies and reported a high level of enquiries for UK equipment, materials and specialist products. This was the 25th edition of Chinaplas which the BPF has now been attending since the mid-eighties. The fair registered over 94,000 visitors, up from 82,000 on last year’s Shanghai fair. Twenty per cent of visitors came from overseas.

The Chinese plastics market allegedly consumes 65 million tonnes of polymer with a more even distribution of applications than in Western Europe.  Packaging, whilst still a major application in China, is significantly less than the 35% it registers in the EU. It was noticeable that the quality of Chinese equipment is improving and at an International Plastics Machinery forum, at which BPF's Philip Law spoke, the Vice-President of the Plastics Machinery association was at pains to stress the need for the industry to meet global safety standards,  registered a concern to protect the intellectual property of the leading brands from the less scrupulous operators in his marketplace and lectured his sector on the need to reflect all costs in the final selling price.

The Chinese plastics machinery industry has increased its share of its domestic market from 49% in 2008  to 72%.  Yet it would be wrong to give a picture of inexorable growth in China as the government is trying to curb property speculation and there are rumours of significant bad debts at the Chinese banks.  The Chinese authorities are struggling to control inflation which is now running at more than 5% and minimum wage increases over the last year across the different provinces hovers around the 25% mark. There are labour shortages on the east coast. The economy is slowing.

Among key trends in the Chinese market is the gradual transference of business from the west coast to the central and eastern provinces, perhaps an indicator of the re-balancing taking place from exports towards domestic consumption. A further factor encouraging the migration is the  wage escalation on the east coast. There has additionally been a marked decline in the export of plastics products over the last three years partly a consequence of falling demand in destination markets related to the sub – prime crisis. A further reason for this is the difficulties faced by Chinese manufacturers in meeting the regulatory standards in the EU. REACH in particular, controlling chemicals used in product manufacture, is hurting Chinese processors and there is a growing appetite for knowledge on how to conform with legislation.

There is a markedly increased interest in ecological themes in the Chinese plastics industry. This was evinced by the theme selected for the Exhibition Conference by organizers Adsale - ‘Eco-friendly Plastics’ -where BPF’s Philip Law gave the keynote speech and spoke about the role and expertise garnered within the BPF’s Bio-based and Degradable Plastics Group. Chris Dow of Closed Loop Recycling  also a spoke  on the future of plastics recycling technology. At the Conference the BPF also launched a Chinese language edition of its Guide to Sustainable Manufacturing in Plastics, essentially a guide to UK competence in the field. ‘Sustainability’ is certainly a term which rings bells for Chinese manufacturers but equally the term ‘Clean Manufacturing’ is widely used. The fact that large numbers  were turned away from this pre-booked Conference speaks volumes about the growing thirst for environmental knowledge.

UK exhibitors had busy stands and all had Chinese agents with them. Particularly noticeable visitors to  the BPF stand were Chinese recyclers in search of UK plastics waste. There were several   large scale opportunities for plastics  in the Chinese market in evidence  at the fair, among them the construction of the Guangdong natural gas pipeline servicing 23 cities and extending 467 kilometres.  Additionally, the province of Hunan is developing a specific plan to develop new energy industries focussing on nuclear, solar and wind power, all with significant opportunities for the use of plastics such as composites.

 The BPF praised  the support given by UK trade and Investment, the  government’s trade promotion arm,  to its Chinaplas venture. The British Consul General in Southern China, Alastair Morgan , spent an entire afternoon on the stand and the key UKTI contact in the Guangzhou Consulate is  Jackie Mullen.

The Chinaplas fair grows and grows. Originally rotating around the three centres of Beijing, Guangzhou and Shanghai on an annual basis, Beijing was dropped after the 2003 edition .The Shanghai fair complex has now  been enlarged to embrace 17 halls  from its modest layout of 5 halls in 2004 and the organisers are confident of  selling  out  for  Chinaplas next year. The only concern for them, according to Stanley Choo, Adsale ‘s Chairman, is the availability of  energy and the avoidance of power interruptions.