Asia is producing more and more packaging and nowhere is this more pronounced than in Thailand. In particular it is plastics packaging for food that is now paving the way forward - according to a report in the Bangkok Post.
For reasons of lower cost and greater durability, polypropylene woven plastic bags and laminated alternatives have replaced those made of paper or woven natural-fibre.
Now, Thailand has 40 manufacturers whose combined sales exceed Baht eight billion (€197m) a year, with annual growth of 8 to10 per cent. Ten are large manufacturers including C.P. Poly Industry Co, a member of the Charoen Pokphand Petrochemical Business Group, which annually makes 150 million bags, of varying design and size, at its plant in Sikhiu district, Nakhon Ratchasima. Annual revenue stands at one billion baht.
Chaiyapong Chainapaporn, the company's vice-president, said that as the firm anticipated 15 per cent annual growth of its own production, an additional investment of 100 million baht would be required by the middle of next year to increase plant capacity. The same amount was spent on expansion earlier this year.
This year, growing demand is being driven mainly by the CP group, whose trading arm uses the bags for packaging rice for both the domestic and export markets, with turnover expected to grow further. Rising export demand for sugar, shrimps and poultry were also contributing to the boost in production.
C.P. Poly Industry now supplies half its production to the CP group for packaging products ranging from animal feed to seeds to food.
The company also makes colourful bags bearing pictures, as well as graphic designs, for department stores.
The market determines the production and expansion strategy.
''When demand is 10 per cent to 15 per cent greater than capacity, we make an additional investment. The company already operates at full capacity so the next investment will be made in the middle of next year,'' Chaiyapong said.
With Thailand's trading pattern evolving from shipping bulk commodities to higher-value semi-processed and processed goods, the country should offer products in attractive small packages, he said.
About 30 per cent of the bags are exported to countries including the United States, Australia, Japan, Taiwan and New Zealand. However, shipments of bags to the EU stopped five years ago when anti-dumping tariffs ranging from 10 per cent to 60 per cent were imposed on a number of countries. C.P. Poly Industry's products face a 30 per cent tariff, making them non-competitive in the EU.
Anucah Komonpale, the company's export manager, said that as the EU would review anti-dumping charges this year, the government should defend the interests of Thai exporters.
The EU needed about 30,000 tons of plastic bags annually but its domestic producers could fill only one-third of the demand. Therefore, the anti-dumping charges could be interpreted as a protectionist mechanism to support local manufacturers.
The company is looking to establish marketing bases in Eastern Europe in expectation of re-entering the EU market.,p>C.P. Poly Industry began bag production in China in 1995 and in Vietnam last year. It is also acquiring the management of woven plastic bag production in Indonesia from CP's feed group.