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Taiwan machinery exports down 10%

Larry Wei, chairman of Taiwanese blow moulding equipment maker Fong Kee International Machinery

Taiwan’s large plastics and rubber machinery industry has seen exports drop by more than 10% since the beginning of 2015, as the slowdown in mainland China has taken a significant toll on the sector.

While China’s difficulties were acting as a drag, it wasn’t all bad news — Taiwan’s industry reported a significant increase in plastics machinery exports to the United States, which officials attributed to strength in manufacturing there.

At its 12 August news conference on the opening day of the Taipei Plas show, industry officials released statistics that point to struggles for Taiwan’s industry.

Plastics and rubber machinery exports for 2015 fell more than 10%, to $1.12bn (€1bn), and that trend continued through the first half of this year, with exports down a further 11% from what was already a tough 2015.

But there is some early evidence that things are turning around.

Alan Wang, chairman of the plastics and rubber machinery committee of the Taiwan Association of Machinery Industry, said that based on recent orders, officials believe the second half of the year will bring the industry back to growth.

Beyond the drop in exports to mainland China, Wang said the industry has been hurt by problems in the electronics and computer manufacturing industries, which are significant customers for Taiwan’s plastics industry.

Exports to China, which is Taiwan’s largest market, plummeted 37% in 2015, to $222m (€199m). That almost single-handedly accounted for Taiwan’s global drop last year.

Executives said Taiwanese manufacturers have been trying to diversify into other markets, including Southeast Asia. Vietnam is Taiwan’s second-largest plastics machinery export market, and shipments there rose 14% in 2015, to $122m (€109.2m).

Larry Wei, chairman of Taiwanese blow moulding equipment maker Fong Kee International Machinery, saw a silver lining in increased exports to the United States, which was Taiwan’s third-largest market.

“This not only suggests the US economy was on the mend, but indicates Taiwan’s plastics and rubber machinery had improved in terms of quality and functionality,” Wei said at the news conference.

Exports to the US jumped 67% last year, to $83.5m (€74.7m).

For other key markets, however, sales dropped. Exports to Taiwan’s fourth and fifth largest export markets, Indonesia and Thailand, each dropped more than 8%.

“Over the last two years, the global manufacturing business has suffered greatly from the economic downturn,” said Michael Wang, a vice chairman of TAMI’s plastics and rubber committee.

“The currency market has also become very volatile,” said Wang, who is also an executive in the Taiwan factory of Hong Kong-based machine maker Chen Hsong. “All of these have had a significant impact on Taiwan’s plastics and rubber machinery industry.”

According to TAMI statistics, Taiwan, which has a population roughly the same as Texas, is the sixth largest exporter of plastics and rubber machinery worldwide, behind Germany, China, Italy, Japan and the United States.

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