Chinese production costs have been skyrocketing of late, meaning global OEMs are taking a more flexible approach to projects in Asia, including transferring production from China to Southeast Asian countries such as Thailand and Indonesia. In parallel with this trend, plastics distributors, are regionalizing their footprints in order to better serve their customers across Asia.
Take Dutch distributor IMCD, for example. The company acquired Singapore-based plastics distributor Paceco Industrial Supplies, whose footprint spanned Singapore, China and Malaysia, in 2012. "We had the option of setting up a new organization or entering through an acquisition," says IMCD Global Product Manager, Plastics, Patrick van Vugt, who will be relocating from the Netherlands to Singapore in August this year to spearhead operations at the regional headquarters. "Paceco's good platform in Asia, including two locations in China, Malaysia, and Singapore, and its strength in engineering plastics made sense to us. It put us well on track to our objective of becoming a leading regional distributor of high-end specialty plastic compounds."