Taiwan’s plastic machinery industry, one of the world’s largest, is seeing a strong economic rebound as mainland China and other emerging markets push production almost to levels seen before the worldwide economic meltdown in 2008.

Speaking at a briefing at the March 5 opening of the Taipei Plas 2010 trade show, leaders of the sector said that while developed economies like North America, Europe and Japan remain sluggish, growing markets in China, India, Brazil and other places have fueled strong sales for Taiwanese machinery firms.

Taiwan’s plastic and rubber machinery output this year is “expected to reach 90 to 100 percent of the peak output of 2008,” before the crisis, said John Hsu, chairman of Taipei-based Taiwan Association of Machinery Industry, which sponsors the Taipei Plas fair.

“2010 could be a good year for the plastic and rubber machinery industry, and we think it is possible for the industry to again be as prosperous as 2008,” said David Wu, head of TAMI’s Plastics and Rubber Machinery Committee and general manager at press maker Multiplas Enginery Co. Ltd. in Taoyuan.

“Companies have been busy taking orders in the last three months, and many of them even have to cut their Chinese holidays short and work overtime to deliver on time,” he said.

Some executives were more measured.

Larry Wei, a vice chairman of TAMI’s plastics committee and president with blow molding equipment maker Fong Kee Iron Works Co. Ltd., said in prepared remarks that while there are signs of recovery, companies need to remain cautious.

He said that because Taiwanese firms are mostly smaller, they are constrained in their research and development capabilities.

Taiwan’s industry also faces long-term risks because its political disputes with mainland China prevent it from fully participating in free trade agreements in Asia and worldwide, and that will put its firms at a competitive disadvantage, according to a Taiwanese government official who addressed the show.

“If this situation continues on in the next 10 years, we will see a lot of competitors get zero duties [in many markets],” said Huang Chih-Peng, director general of Taiwan’s Bureau of Foreign Trade. Mainland China considers Taiwan a renegade province.

The global recession hit the Taiwanese machinery industry hard, with markets drying up in the first half of 2009 and overall sales for the year down 30 percent. Still, the last few months have seen a strong recovery, companies said.

“The economic forecast of 2010 is generally positive, and markets in Southeast Asia, India, Brazil, the Middle East and Russia are considered as the ones with the greatest potential,” said Bush Hsieh, a vice chairman of TAMI’s plastics committee and director at Chumpower Machinery Corp.

Any Taiwanese recovery at this point seems to depend heavily on mainland China. About half of Taiwan’s plastic and rubber machinery exports are to China, and most of its customers there are Taiwanese companies with operations in the mainland, Wu said.

While some analysts question whether China’s economic recovery depends too heavily on government stimulus spending and a real estate bubble, Wu said China’s policy in the crisis of subsidizing home appliance, car and construction purchases in rural areas has benefited the Taiwanese industry.

He also said Taiwanese firms benefit from India’s decision last year to impose steep tariffs on Chinese-made injection molding machines. Many Indian companies now head to Taiwan to look for equipment.

TAMI officials said Taiwan’s plastic and rubber machinery sector ranks among the largest in the world, in both production size and exports.

TAMI said Taiwan’s industry probably is the fourth biggest exporter of plastic equipment, behind Germany, Italy and Japan, with the ranks of the other large machinery makers including China, the United States and Switzerland. TAMI officials said they believe Taiwan’s industry fared better than competitors in Europe and Japan in the economic downturn.

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