Overcoming the ups and downs of a volatile global marketplace

The uncertainties brought about by the financial crisis in the United States has started to affect the rest of the world. This has caused some jitters to all types of businesses, and the plastics industry is expected to feel the adverse impact of this global phenomenon. As 2009 draws near, the International Plastics News for Asia gathers the insights and forecasts of those in the plastics industry on what they expect and the factors that can affect their market performance and operations in the coming year. This special report covers an excellent mix of respondents: Mr. Lim Kok Boon, President of the Malaysian Plastics Manufacturers Association to present the industry perspective; Mr. Sunil Jain of Rajoo Engineers Limited of India, a global player in blown film and sheet extrusion lines, and Mr. Mingo Lai, Vice Manager of Queen's Machinery Group of Taiwan, one the largest manufacturers of plastics machinery in the region to represent the plastics machinery sector; Mr. Milan Vignjevic, head of Lanxess" Business Unit Semi-Crystalline Products for Asia Pacific, a multinational manufacturer of chemicals and intermediates, engineering plastics and performance rubber to provide the views coming from the plastics materials sector; and Mr. Robert Quinto, General Manager of Jhaymarts Industries, Inc., a pioneer manufacturer of polyethylene pipes in the Philippines to represent plastics products sector.

Mr. Peter L. Wallace President The Wallace Business Forum Tel: +63-2 810 9606 Fax: +63-2 810 9610 Email: plw@mydestiny.net Website: www.dataphil.com

Southeast Asia is a highly dynamic region and it has been the ideal site for industrial manufacturing having the experience and support for industries such as electronics, automotive, including ships/boats, plastics, consumer products, etc. It has a large pool of highly-skilled workers and a strong ambition to be among the world's major suppliers of these products. As a regional bloc, Southeast Asia by itself is a large market especially as it is transformed into a free trade area in a few years. The region and its countries can also take advantage of the complementarity of the industries. For businesses in Southeast Asia, the key concerns would include dealing with countries with volatile policies and weak institutions (change in leadership would mean start of the negotiating process again), environmental activism and local governments with tendencies for extracting rents. High cost of labor, power and utilities are also considerations. Another concern is the present global economic downturn as businesses in Southeast Asia will likely be affected to a certain extent, because a large share of their finished products are actually sold to end-users in the US and since the US slowdown has started to drag down the rest of the world, that will also affect their markets outside the US. To survive and prosper in Southeast Asia, I would advise companies to develop good relationship with key people in the government, find reliable local partners and professional advisers, and conduct a thorough risk assessment study especialy if they are new in the area.

Mr. Lim Kok Boon President Malaysian Plastics Manufacturers Association Tel: +603 6092 3333 ext. 215 Fax: +603 7876 8352 Email: kblim@gwpi.com.my Website: www.mpma.org.my

Several factors could affect the overall performance of the Malaysian plastics industry in 2009. One of these is the substantial increase in resin supply from the Middle East. The new suppplies are expected to come from several world-class resin producers that would benefit from substantially cheaper feedstock derived from natural gas which is abundant in supply in the Middle-East. Another external factor is the financial situations in majoNike