Trade Resources Industry Views Indian Companies See Africa's Plastics Industry Grows

Indian Companies See Africa's Plastics Industry Grows

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As Africa’s plastics industry grows, Indian companies say they are picking up substantial business there, with exports rising for machinery firms, and India’s resin and processing companies making investments. The India factory of U. S. Machinery firm Milacron LLC, for example, said it sends more than 200 injection presses a year to Africa, its largest export market and more than 20 percent of its total production. On the resin side, PET maker Dhunseri Petrochem & Tea Ltd. In Kolkata is building what it says will be Africa’s first PET polymer plant, to make bottle and food grade material in Egypt. The 420, 000 metric ton facility is scheduled to open next year. Boosting African business was a common theme in comments of Indian companies at the recent Plastindia trade show. For example, one of the country’s largest film extruders, Cosmo Films Ltd., said it was looking for an African location for a biaxially-oriented polypropylene film factory. “African countries are really growing, particularly in West Africa and East Africa, ” said Shirish Divgi, chief operating officer for Ferromatik Milacron India Pvt. Ltd. In Ahmedabad. “Primarily the plastic industry [in Africa] is oriented toward the household and furniture industries, but recently we have seen many upgraded activities in other sectors, like writing instruments and construction molding like fittings. ” Even if on a global scale African markets are small, Indian machinery executives say they are seeing more factory building. “In Africa before, everything was imported, ” said Rajendra Shukla, director of rotomolding machinery manufacturer and mold maker M. Plast (India) Pvt. In Noida. “Now everybody is putting a manufacturing facility there. It is a significant market. ” Over the last five years, Africa has in some years been the company’s largest export market, he said in a Jan. 30 interview at the Society of Asian Rotomolders conference in New Delhi. M. Plast signed a technology transfer and marketing pact there with Italian mold maker Roto Moulds srl. One goal is to make better molds to meet demand in Africa and the Middle East, the partners said. Some of India’s largest equipment firms also say they see opportunities. Equipment maker Kabra Extrusiontechnik Ltd. Said Africa accounts for more than 25 percent of its exports “and growing, ” although executives said the political changes sweeping North Africa have slowed business. And injection press maker L&T Plastics Processing Machinery said it has identified Africa as a key growth market: “I see a lot of potential, ” said CEO P. Kailas, in an interview at Plastindia, which was held Feb. 1-6 in New Delhi. Expanding African consumer markets One of the broad drivers of growth is an expanding African middle class with more purchasing power, said Chandu Shah, chairman of rotational molder Kentainers Inc., based in Nairobi, Kenya. Kentainers was established in 1990 and now has six rotomolding factories with 400 employees in six African countries, making water tanks, sanitation products and material handling goods. The local rotomolding market is growing 20 percent a year from its small base, he said, although the world economic situation has taken a toll more broadly: “The foreign direct investment has dried up. The inbound remittance of the Kenyans living abroad has gone down significantly. ” Still, he said new local competitors have entered the rotomolding market in recent years, and plastics-related trade with India has grown, Shah said. “India has become a source of a lot of machines and materials, and a source of hiring expatriates, ” he said. The substantial numbers of expatriate Indians who live in Africa and run businesses there give Indian firms an advantage, with many Indian executives saying their Africa trade is largely within that group. Another factor pushing growth are “mega-projects” like mining which bring in foreign direct investment and have helped offset the world economic slowdown, said Gerry Marketos, CEO of rotomolder Plastex Dura Mais-Custa Menos in Maputo, Mozambique. Countries without substantial FDI are suffering, however, he said. Plastex, which was established in 1996, has 200 employees and more than 15 rotomolding machines. Part of what binds the markets is that India and Africa have similar economic and social needs, and that makes both Indian plastic products and machinery well-suited to Africa, Marketos said. “I will give you an example. All of us know there is a serious problem in the sanitation sector in both countries, ” he said. “There are a couple of plastics products manufactured [in India] to cater to the sanitation need, that could also be applied in Africa. The customer base is pretty similar. ” Marketos said he regularly comes to Indian events to look for new product ideas and machinery that he can easily apply, and finds India’s base of small and medium-sized companies very entrepreneurial. He said there are many challenges operating a plastics processing business in Africa, including infrastructure, logistics, and high rates of absenteeism and deaths of employees from malaria and HIV. Still, even with the challenges, Indian companies are entrenched. Problems are serious, but Africa experts note the growth of a middle class and economic possibilities after years of reforms. The Economist magazine in December termed it the “hopeful continent, ” with a “real chance to follow in the footsteps of Asia. ” “We are going there regularly, we are talking to the people and we are in touch with the processors there, ” said Ferromatik Milacron’s Divgi. “We want to grow with Africa. ” Source: plasticsnews.com

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Indian plastics firms see growing opportunity in Africa
Topics: Machinery