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Malaysian plastic packaging converters brace for global slowdown

Malaysian plastic packaging converters bracing for global slowdown, Packaging, Asia, Malaysia, Thong Guan Industries Bhd
Local plastic packaging materials manufacturers are bracing for a sluggish first quarter in 2012, brought about by the global economic slowdown.

Thong Guan Industries Bhd, one of Malaysia’s largest exporter of plastic packaging materials to Japan, expects the Wenzhou financial crisis in China - which has seen cash-strapped SMEs in the major industrial city struggle to repay bank loans - to affect the demand early next year.

“This will hamper demand for plastic materials in China and the region,” said group managing director Datuk Ang Poon Chuan.

In addition, domestic growth is expected to slow down next year due to the weak demand for industrial packaging materials, he added.

However, the company plans to offset the slowdown by expanding its presence in Australia, New Zealand, and the Middle East, revealed Ang: “We plan to increase the contribution (of these markets) to 20% next year from 15% in 2011.”

Thong Guan's two new production lines, which will begin operations end of this month, is expected to boost the group's yearly output by 10,000 tonnes to 110,000 tonnes.

Meanwhile, plastic packaging material producer SLP Resources Bhd also expects demand in first quarter of 2012 to slow down, compared with the fourth quarter of 2011.

SLP’s managing director Kelvin Khaw said this was due to lower customer confidence in the global market, and also noted

While the fourth quarter has been upbeat, Khaw said that this is mainly due to the upcoming Christmas holidays, coupled by stable demand from Australia, New Zealand, Japan, and Europe.

“Customers are buying because of their need to use plastic packaging materials during the festive season and not so much because the price of plastic resin has gone down,” he said, noting that current plastic resin prices were hovering around US$1,300 per tonne in October, compared with US$1,380 in June.

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