India ripe with opportunities for Canadian plastics firms (June 07, 2005)
India's rapidly growing plastic industry is creating many opportunities for Canadian plastics firms, but few are ta...
June 7, 2005 by Canadian Plastics
India’s rapidly growing plastic industry is creating many opportunities for Canadian plastics firms, but few are taking advantage of them, according to the Canadian Plastics Industry Association (CPIA).
Serge P. Lavoie, president of the CPIA, said that Canadian businesses simply don’t take India seriously, and when they do, they’re not aggressive enough.
“The perception is that we come, we talk, but we don’t follow through,” Lavoie said, adding that has also heard similar complaints from Polish and Ukrainian firms.
As a result, India often overlooks Canada, but Indian companies are receptive to Canuck technology when it’s presented to them properly, Lavoie noted.
Lavoie recently visited India to assess local plastics production, and to forge relationships with companies and Indian plastics industry associations. He also spoke at a meeting hosted by Export Development Canada (EDC) in Toronto in early June, where delegates discussed how Canadian companies could take advantage of India’s plastics market.
GETTING TIED UP
The preferred method of doing business with foreigners is by forming a joint venture, or “tie-up” as they are called in India, Lavoie said. Navin Dave, Canadian managing partner with KPMG, recommends contacting EDC or the CPIA for assistance accessing reputable contacts because it is not uncommon for foreigners to be preyed upon by slick con-artists.
Additionally, Canadian companies venturing into India need to learn how to protect their intellectual property (IP), said IP lawyer, Ken Dhaliwai, a partner at Heenan Blaikie LLP. Now that India has joined the WTO, it has to comply with TRIPS (trade-related aspects of intellectual property rights), an attempt to make patent laws apply across borders between WTO members. However, India still has a ways to go before it will be able to enforce the rules as well as westernized nations. However, India knows it is under scrutiny and is doing its best to improve, Dhaliwai said.
Right now, India’s biggest problem is that it cannot do enough plastics processing, or produce enough resins, molds and machinery to satisfy its domestic needs. That’s why India turns to importing. Its biggest trading partners include the US, Taiwan, Korea, Germany, Japan, Italy, France, the Netherlands, France and the UK. But now, EDC and the CPIA want to help Canadians tap into this lucrative market.
The rise of India’s middle class means plastics consumption is increasing. Demand for more consumer goods and more hygienically packaged food, are just a couple of things the middle class want, and both require plastics for parts and for packaging, explained Luc Dupont, regional manager for Asia at EDC.
“The sheer size of the country makes it a player that could change the global landscape,” said Luc Dupont, regional manager for Asia at EDC. “With the right methodology, there is achievable business potential,” he said.
FITTING THE MOLD
For example, India imports the vast majority of its sophisticated molds, usually from Korea, Taiwan, Italy and Japan, the report said. The latest data is from 2000, when India needed about $1 billion worth of molds, but could only fill 65% of the demand itself, according to the report.
The value of Canadian molds exported to India rose significantly between 1997 and 2002, where $91,200 worth was exported in 1997 increasing to $2.2 million in 2002. In 2003, it dropped to just over $1.5 million and it declined further to just under $1.2 million in 2004, according to the report.
In comparison, Korea exported $20 million worth of molds to India in 2003.