An Analysis on Abrasives Market in Southeast Asia

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The article explains the characteristics and current situation of the abrasives industry in southeast Asian regions, which is a huge potential market for China's abrasive companies.

Abrasives and Diamond Tools Marketplace

Abrasives and Diamond Tools Marketplace

Thanks to the geographical location, most southeast Asian nations are major trade partners of China. ASEAN (Association of Southeast Asian Nations) members are developing countries, Singapore excluded. The economic structure of developing countries, such as Vietnam and Laos, is simple.

Currently, most southeast Asian nations do not have an integrated abrasives industry. There are no big abrasives manufacturers with a complete range of abrasives products, and abrasive companies are scattered. At METALEX 2014, most abrasives manufacturers of Thailand are subsidiaries of Japan, South Korea, and China Taiwan enterprises. Their production mode is importing primary raw materials and reprocess abrasives products, such as shank-mounted flap wheels, wire wheels, abrasive sanding belts, non-woven flap wheels, etc. The products are low in technological content and added value. Most abrasives products are imported from foreign countries, so these nations are highly dependent on import. Importing countries include China, Japan, South Korea, U.S., and other countries and regions of EU.

With the rapid development of China's economy, problems, such as rising labor costs, land price, and manufacture costs arise. Some abrasive companies began to invest in southeast nations that have cheap labor force. Some of abrasive companies have moved their factories to Thailand and Vietnam.

According to the latest statistics from China Customs, in Jan 2014, Vietnam's total export-import volume was $21,480,000,000, a decline of 9.9%. The import volume was $10,020,000,000, a decline of 17.8%. The import goods were machines, equipment, tools, and accessories. The abrasives trade between China and southeast Asian nations have seen an obvious growth, while the unstable market trend in Indonesia, Vietnam, and Cambodia has left Chinese abrasive companies little interest.

The abrasive companies marketing strategy in European markets is low price; however, for southeast Asian markets, Chinese abrasive companies are suggested to lead the market trend based on competitive advantages. Burma is rich in mineral resources. The major industries in Thailand are stone, construction, and Jewelry making industries. The situation is a good opportunity for China's abrasive companies that depend on cheap labor force and energy consuming.

In view of market development and product competitiveness, Chinese abrasive companies consider southeast Asian markets as the second trade regions. With the preliminary industrialization of southeast Asian nations, there is an increasing demand for abrasives products. in addition, China should try hard to meet all demands by making clear product features and marketing strategies of competitors.

Market potential and vitality is huge. China's abrasive companies can shift excess production capacity to southeast Asian regions where cheap labor force and rich resources coexist. Since these regions are important markets and manufacturing bases of Japan, South Korea, and Taiwan, China's abrasive companies can learn from advanced technologies and new developing trend to improve international competitiveness and popularity of independent brands.

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since: 08/2012
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