What opportunities for masterbatch manufacturer in Vietnam penetrating Indian market?
The number of masterbatch manufacturers in India has rapidly increased in recent years and this situation reflects partly the growing demand for using plastic masterbatch in the second most populous country in the world. This can be considered a good sign for Vietnamese masterbatch manufacturer who wants to enter this lucrative market. In this article, we will discuss several opportunities as well as drawbacks and challenges that companies may have.
1. Overview of the plastic industry in India and how it affects masterbatch manufacturers in this country
The plastic masterbatch manufacturing and processing industry are now considered to be one of the most developed industries in India with a high annual growth rate of 16%, along with a turnover of more than 20 billion USD. This market is surrounded by 25,000 companies and is providing jobs for over 3 million employees. In 2009, the domestic productivity itself reached 5.72 million tonnes of polymer and plastic.
India – the potential market with various opportunities for masterbatch manufacturers around the world
In comparison with other countries, the masterbatch industry in India is also the market with the highest growth rate in the world with an annual 16% consumption growth rate (compared to 10% of China – the second largest marketing and 2.5% of the UK). Particularly, along with the development of masterbatch manufacturers, plastic processing industries with high growth rates serving other industries are also the country's strengths such as electronics, automobiles, medical equipment, consumer goods, and packaging-technology-related products like pallets, PE film, etc.
What is the main technique used by Indian masterbatch manufacturer?
Regarding to the main processing technologies applied in the plastic industry in India, the injection molding techniques hold the first position with 58% of masterbatch manufacturers applying this technique. Following injection molding are extrusion molding and blow molding accounting for 30% and 10% of the total market, respectively. Other techniques are negligible with only 2% in production.
2. The increasing demand in India has promoted the invasion of Vietnamese masterbatch manufacturer
Although the total export turnover of Vietnam to India is still quite modest, especially the plastic industry only accounted for 15.9 million USD (in 2011 - according to the statistics of the Vietnam Trade Promotion Department), according to experts, India is a promising market for Vietnamese masterbatch manufacturer because its standards and requirements are suitable with the technology and production capacity of most Vietnamese plastic enterprises.
According to Viettrade, the growth rate plastic industry in this populous country (estimated by the total value of masterbatch manufacturer) is approximately 2-2.5 times higher than its GDP, which means that the growth rate, as well as the demand in using plastic masterbatch products in India, is many times higher than the average development of other industries. This circumstance indicates that their efforts in accelerating technology and production capacity have opened up various opportunities for Vietnamese companies to export raw materials (filler masterbatch, color masterbatch, plastic additives, etc.) to supply this development.
Stable development in India is beneficial for foreign masterbatch manufacturer
Along with that, the level of stability in economic development leads to the increasing use of plastic products in different industries, consequently leading to many opening opportunities for masterbatch manufacturers. It is expected that the total revenue of the plastic industry in India will reach USD 10 billion by 2020 with more than 40,000 new technology and machines being installed and applied into production. Several industries/sectors will be considered as the leading prospects such as: developing new applications and products, high-tech machines development, technology transformation, high-tech product completion, etc.
What are the advantages of Vietnamese masterbatch manufacturers over Indian companies?
The plastic industry in recent years has been mainly known as a plastic processing industry because it has to import 80% of materials. This is in contrast to the biggest advantage that Vietnamese masterbatch manufacturers is owning regarding the production of Filler Masterbatch (an additive plastic masterbatch) which is the main material in the production of plastic pellets from the ownership of large limestone resources in the North and Central. Even in comparison to the two major manufacturing markets of the world which are China and India, Vietnam has a huge advantage from the better and more stable quality of input material resources. In addition, we also have cheaper labor costs.