Global Market Opportunities for U.S. Moldmakers -- BRIC Countries

Global Market Opportunities for U.S. Moldmakers

Brazil, Russia, India and China (BRIC)

August 26, 2014

Presented By:Michael D. Taylor, Senior Director, International Affairs and Trade

Upcoming Global Market Opportunities for U.S. Moldmakers Webinars

November 18 Europe

• Macroeconomic Overview• Ease of Doing Business• Trade Flows & Market Opportunities• Trade Missions• Q&A

Agenda

Michael Taylor Michael Taylor is Senior Director for International Affairs and Trade at SPI: The Plastics Industry Trade Association. Mr. Taylor serves as SPI’s primary staff expert on international trade policy, programs, and activities. He advises SPI staff and membership on the impact of international trade law and regulatory actions, and advocates SPI positions before government officials and other policy makers. Mr. Taylor organizes and leads trade missions, provides trade facilitation services, and assists member companies in market entry planning and execution. Prior to his current responsibilities, Mr. Taylor was Director, Europe and Multilateral Programs of the Global Intellectual Property Center (GIPC) at the U.S. Chamber of Commerce. Mr. Taylor is a part-time lecturer in political science at Trinity Washington University in Washington, DC. He has taught undergraduate and graduate courses in American politics, comparative politics, international relations, political economy, and research methods for more than twenty years. He received his B.A. in International Affairs from the Elliott School of International Affairs at the George Washington University, and his M.A. in World Politics from the Catholic University of America.

BRICS Bank Announced

• Headquartered in Shanghai, the new BRICS Bank actually takes the form of a pair of new institutions.

• The New Development Bank, with $50bn in initial capital, will finance infrastructure and sustainable development projects (much like the World Bank), and the Contingent Reserve Arrangement, with $100bn in initial capital, will provide assistance to members in financial difficulty (much like the IMF).

Macroeconomic Overview

Growth of Plastics – Industry Exports

NAFTA BRIC Free Trade Agreement Countries

Asia EU28 South America TOTAL-10%

-5%

0%

5%

10%

15%

10.6% 10.0%10.9% 11.2%

6.5%

11.5%10.4%

6.2%

-7.4%

3.8%

-8.3%

-4.0%

2.2%1.3%

4.9%2.6% 3.5%

-4.4%

3.4%

-2.9%

2.7%

2011 2012 2013

Percentage Growth of Plastics Industry Exports2011-2013

Changes in U.S. Plastics Industry Exports

Mexico Canada China Belgium Brazil Japan South Korea

Germany United Kingdom

Singapore-30%

-20%

-10%

0%

10%

20%

30%

40%

10.4% 10.9%8.2%

2.7%

13.0%

4.7%

11.4% 10.6% 10.4%

36.1%

9.4%

2.9%

-8.8%

-2.9% -4.6%-2.5% -2.5%

-9.8%

0.8%

-20.8%

9.1%

0.4% 0.5%

10.9% 11.4%

-12.9%

14.4%

2.0% 2.0%

-20.2%

2011 2012 2013

Changes in U.S. Plastics Industry Exports for the Top 10 Exports Markets2011-2013

Top Ten U.S. Plastics Industry Export Markets

Canada Mexico China United Kingdom

Japan Germany Netherlands Belgium Brazil Singapore World-20%

-10%

0%

10%

20%

30%

40%

50%

60%

4.8% 5.3%

10.5% 11.5%7.4% 7.2%

49.4%

-1.0%

0.7%

-0.3%

5.6%

0.4%5.3% 5.3%

15.6%

-5.4%

7.4%

18.8%

-1.2%

2.2%

-7.8%

1.5%

Plastic Products Manufacturing All Manufacturing

Percentage Changes in Exports for the Top Ten U.S. Plastics Industry Export Markets Second Quarter 2014 Versus Second Quarter 2013

Why the BRIC are Important

• The BRIC are both the fastest growing and largest emerging markets economies. They account for almost three billion people, or just under half of the total population of the world. In recent times, the BRIC have also contributed to the majority of world GDP growth.

• Projections say it is only a matter of time before China becomes the biggest economy in the world - sometime between 2030 and 2050 seems the consensus. In fact, Goldman Sachs believe that by 2050 these will be the most important economies, relegating the U.S. to fifth place.

• By 2020, all of the BRIC should be in the top 10 largest economies of the world. The undisputed heavyweight, though, will be China, also the largest creditor in the world.

GDP Growth Rate 2000-2012 (Annual %)

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

-10

-5

0

5

10

15

20

Brazil ChinaIndia Russian Federation

Ra

te o

f G

row

th

Exports of Goods and Services 2000-2012

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

0

5

10

15

20

25

30

35

40

45

50

Brazil ChinaIndia Russian Federation

Pe

rce

nt

of

GD

P

Inflation, Consumer Prices2000-2012

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

-5

0

5

10

15

20

25

Brazil ChinaIndia Russian Federation

An

nu

al P

erc

en

tag

e

Total Unemployment2000-2012

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

0

2

4

6

8

10

12

Brazil ChinaIndia Russian Federation

% o

f T

ota

l La

bo

r F

orc

e

HSBC China Manufacturing Purchasing Managers' Index

Ease of Doing Business Index

Ease of Doing Business

Economy

Ease of Doing

Business Rank

Starting a Business

Dealing with Construction

Permits

Getting Electricity

Registering Property

Getting Credit

Protecting Investors

Paying Taxes

Trading Across Borders

Enforcing Contracts

Resolving Insolvency

Russia

92 26 59 37 2 41 41 12 48 4 18

China 96 52 62 38 14 26 34 33 25 7 26

Brazil 116 42 41 6 37 41 30 50 35 40 50

India 134 61 61 34 31 11 13 49 40 61 43

Trade Flows & Market Opportunities

In 2013: – U.S. plastics industry exported goods valued at $2.3

billion, up 11.4 percent from 2012

• Resins: $1.7 billion (+13.4 percent)

• Products: $461 million (+5.6 percent)

• Machinery: $64 million (+7.9 percent)

• Molds: $7 million (-20.4 percent)

– Plastics imports were down 0.9 percent to $232.2 million

– Positive trade balance of $2.0 billion

U.S.-Brazil Trade Statistics 2013

In 2013: – U.S. plastics industry exported goods valued at $395.9

million, down 2.9 percent from 2012

• Resins: $303 million (-9.1 percent)

• Products: $73 million (+18.3 percent)

• Machinery: $20 million (+55.4 percent)

• Molds: $377 thousand (+272.1 percent)

– Plastics imports were up 20.2 percent to $24.8 million

– Positive trade balance of $371.1 million

U.S.-Russia Trade Statistics 2013

In 2013: – U.S. plastics industry exported goods valued at

$702.3 million, down 4.6 percent from 2012

• Resins: $504 million (-4.1 percent)

• Products: $170 million (-3.3 percent)

• Machinery: $27 million (-19.1 percent)

• Molds: $1 million (-0.3 percent)

– Plastics imports were up 0.5 percent to $435.5 million

– Positive trade balance of $266.8 million

U.S.-India Trade Statistics 2013

U.S.-China Trade Statistics 2013

In 2013: – U.S. plastics industry exported goods valued at $4.8

billion, up 0.5 percent from 2012

• Resins: $3.5 billion (+0.6 percent)

• Products: $1.2 billion (+2.3 percent)

• Machinery: $137 million (-15.7 percent)

• Molds: $15 million (+27.8 percent)

– Plastics imports were up 6.6 percent to $12.2 billion

– Negative trade balance or deficit of $5.6 billion

U.S. Plastics Industry Exports to the BRIC Countries 2000-2013

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

0

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

5,000,000,000

6,000,000,000

China Brazil India Russia

U.S

. $ M

illio

ns

U.S. Molds Exports to the BRIC Countries 2000-2013

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

130

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

China Brazil India Russia

U.S

. $

Th

ou

san

ds

The Distribution of Molds Exports to BRIC Countries

2013

57.3%14.5%

14.2% 0.1%0.1%

INJECTION TYPE MOLDS FOR RUBBER OR PLASTICS, NESOI

MOLDS FOR RUBBER OR PLASTICS, OTHER THAN INJECTION OR COM-PRESSION TYPES

COMPRESSION TYPE MOLDS FOR RUBBER OR PLASTICS, NESOI

INJECTION OR COMPRESSION TYPE MOLDS, FOR THE MANUFACTURE OF SEMICONDUCTOR DEVICES

INJECTION OR COMPRESSION TYPE MOLDS FOR RUBBER OR PLASTICS,FOR SHOE MACHINERY

U.S. Molds Exports to Brazil by Type 2000-2013

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

130

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

INJECTION TYPE MOLDS FOR RUBBER OR PLASTICS, NESOI COMPRESSION TYPE MOLDS FOR RUBBER OR PLASTICS, NESOI MOLDS FOR RUBBER OR PLASTICS, OTHER THAN INJECTION OR COMPRESSION TYPES INJECTION OR COMPRESSION TYPE MOLDS FOR SHOE MACHINERY INJECTION OR COMPRESSION TYPE MOLDS, FOR THE MANUFACTURE OF SEMICONDUCTOR DEVICES

U.S

. $

Mill

ion

s

U.S. Molds Exports to China by Type 2000-2013

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

130

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

INJECTION TYPE MOLDS FOR RUBBER OR PLASTICS, NESOI INJECTION OR COMPRESSION TYPE MOLDS, FOR THE MANUFACTURE OF SEMICONDUCTOR DEVICES MOLDS FOR RUBBER OR PLASTICS, OTHER THAN INJECTION OR COMPRESSION TYPES COMPRESSION TYPE MOLDS FOR RUBBER OR PLASTICS, NESOI INJECTION OR COMPRESSION TYPE MOLDS FOR SHOE MACHINERY

U.S

. $

Mill

ion

s

U.S. Machine Tools Exports to the BRIC Countries 2000-2013

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

130

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

China Russia Brazil India

U.S

. $

Mill

ion

s

BRIC Summary• Only China and Russia showed growth overall from 2012 to 2013.

• In China, the most growth was in Injection-Type Molds NESOI, Injection/Compression Type for Semiconductor Devices, and Injection/Compression Type Molds for Shoe Machinery.

• In Russia, the most growth was in Non-Injection/Non-Compression Type Molds.

• For China, the most consistent performer from 2000 to 2013 was Injection Type Molds NESOI.

SPI 2013 Upcoming Trade Missions

Istanbul, Turkey December 4-7, 2014 in conjunction with Plast Eurasia 2014 and

PAGDER

Upcoming Global Market Opportunities for U.S. Moldmakers Webinars

November 18 Europe

Thank You!

谢谢 Merci Vielen Dank

Grazie ありがとうございました 감사합니다 Obrigado Спасибо Gracias Teşekkürler

Questions & Answers

Michael Taylormtaylor@plasticsindustry.org202-974-5232