Global Market Opportunities for U.S. Moldmakers

Europe

November 18, 2014

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

Agenda

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

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.  

Macroeconomic Overview

Europe’s Economic Outlook for 2015

• The economic outlook for 2015 is not expected to be robust. A European Commission report suggests that the road to recovery that started in 2013 will continue to remain fragile even in the next year and may pick up steam in 2016.

• 2014 has not been a very good year for some countries in the European region, while some others have done well in terms of recording growth. Cyprus reportedly saw a dip in growth to -2.8 percent, while Ireland grew at a healthy 4.6 percent.

• The European Commission expects the Real GDP growth in the EU to be 1.3 percent in 2014. This is expected to rise to 1.5 percent in the year 2015. However, there are still geo-political risks in the region emanating from fluctuations in oil prices due to the terrorist organization ISIL and tensions with Russia.

Ease of Doing Business Index

Ease of Doing Business

Note: Countries are sequenced according to the WEF 2014 ranking. Red represents ranking deterioration, green signifies ranking improvement, and no color represents no change.Source(s): World Economic Forum and World Bank and Heritage Foundation

Trade Flows & Global Markets

Top Industry Export Markets

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

$0

$5,000,000,000

$10,000,000,000

$15,000,000,000

$20,000,000,000

$25,000,000,000

$30,000,000,000

$35,000,000,000

$40,000,000,000

Mexico Canada China Belgium BrazilAll Others

U.S

. $ B

illio

ns

Top Plastics Industry Export Markets 2013

All Others $23.3 billion

Mexico $14.9 billion

Canada $12.7 billion

China $4.8 billion

Belgium $2.3 billion

Brazil $2.2 billion

Total $60.3 billion

Positivetrade balanceof $12.1 billion

$48BPLASTICS 5.7%

2013 Trade Statistics

In 2013, the U.S. plastics industry exported goods valued at $60.1 billion, up 2.7 percent from 2012

$34.5BRESINS 2.2%

$23.7BPRODUCTS 3.9%

$1.4BMACHINERY 3.9%

$587.1MMOLDS 0.7%

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

Mex

ico

Canad

a

China

Belgi

umBra

zil

Japa

n

South

Kor

ea

Germ

any

Unite

d Kin

gdom

Singa

pore

-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 Export 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

In 2013: – U.S. plastics industry exported goods valued at $7.9

billion, up 3.7 percent from 2012

• Resins: $4.4 billion (+5.3 percent)

• Products: $3.1 billion (+1.4 percent)

• Machinery: $308 million (+6.0 percent)

• Molds: $54 million (+7.7 percent)

– Plastics imports were up 8.6 percent to $8.2 billion

– Negative trade balance of $238 million

2013 US-EU28 Trade Statistics

U.S. Plastics Industry Exports to the EU28 2000-2013

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

Belgium Germany United Kingdom Netherlands France Ireland Italy Spain Poland Czech Republic

U.S

. $ M

illio

ns

U.S. Plastic Molds Exports to the EU28 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

Germany United Kingdom Ireland France Belgium Poland Czech Republic Spain Italy Austria

U.S

. $

Mill

ion

s

Trade Missions

Trade Mission Components

Column1 B2B Matchmaking

Doing Business Presentation/Panel

Networking Oppor-tunities

Facility Visit/Tour

Cultural Event

Political Meetings

SPI 2014 Upcoming Trade Mission

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

Istanbul,Turkey

Can Turkey Become 'the China of Europe'?

20

Growth Forecasts for Selected Countries/Country Groups

U.S. Plastics Industry Trade with Turkey 2013 YTD to 2014 YTD

2013 YTD 2014 YTD Percentage Change

Industry Exports $6,909,200,931 $7,028,674,246 1.7%

- Resins $273,166,954 $195,760,409 -28.30%

- Products $28,528,470 $34,244,259 20.00%

- Machinery $5,908,793 $4,525,108 -23.40%

- Molds $11,729 $243,225 1973.70%

Industry Imports $307,615,946 $234,773,001 -23.70%

Market Opportunities

Top Ten Plastics Industry Export Markets of the EU28

Top Ten U.S. Plastic Molds Export Markets of the EU28

The Distribution of Molds Exports to EU28 in 2013

36.1%

3.7%

25.6%

19.1%

15.5%

INJECTION TYPE MOLDS FOR RUBBER OR PLASTICS, NESOI

MOLDS FOR RUBBER OR PLASTICS, OTHER THAN IN-JECTION OR COMPRESSION TYPES

COMPRESSION TYPE MOLDS FOR RUBBER OR PLASTICS, NESOI

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

INJECTION OR COMPRESSION TYPE MOLDS, FOR RUBBER OR PLASTICS, FOR THE MAN-UFACTURE OF SEMICON-DUCTOR DEVICES

U.S. Molds Exports to EU28 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

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

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

U.S

. $

Mill

ion

s

Focus Markets in Europe

Czech Republic

In 2015, the Czech economy will expand 2.5 percent. Cyclical expansion in Germany is pulling demand for intermediate products made in the Czech Republic. Output of manufactured goods such as wood, refined petroleum, rubber and plastics, and fabricated products is particularly strong.

Germany

In 2015, overall economic growth will reach only 2 percent in Germany. This is respectable by European standards, but well short of past performance. On the positive side of the ledger, a higher minimum wage, rising immigration and a steady flow of women into the labor force are strengthening the possibility for growth beyond 2015. Manufacturing production has rebounded and is running better than 4 percent at an annual rate. Private consumption is fueled by rising income and wealth along with a housing surge. The manufacturing boom is broadly based with durable goods such as electronics and optics performing particularly well. Output of intermediate goods went up 5 percent since the beginning of 2013.

Focus Markets in Europe

Spain

As structural reforms imposed by the IMF have taken hold, Spanish growth is picking up speed. Increased productivity has enabled moderate pay raises. Exports are also on an upward trajectory. The country had three consecutive quarters of growth up to the first quarter of 2014. Amid returning business confidence and falling interest rates, the labor market has stabilized and demand for labor is increasing. Spain will remain near the lower end of the manufacturing growth rankings over the next 1.5 years. The recovery is broad based but subdued. Pockets of particular strength include electronics and selected types of specialized machinery.

Austria

The Austrian recovery is moving at a moderate but steady pace. GDP gained about a percentage point in total over the past three quarters and the economy should grow about 1.5 percent this year while expanding at a faster pace in 2015. The recovery has been export-led thus far. The industrial side of the economy is only just now getting off the ground with production of chemicals, pharmaceuticals and motor vehicles trending upward. Expect total output to increase to just under 3 percent this year and a little more than that in 2015.

Poland

Poland’s expansion is gathering pace. In spite of this, growth in consumer spending slowed somewhat last year. Poland is significantly exposed to the turmoil in Ukraine. With trade and investment links to Russia and Ukraine so large, business sentiment could suffer should tensions escalate and sanctions be imposed. Manufacturing is seeing strong growth. At a predicted annual growth rate of about 6 percent this year and next, the country will rank near the top of the EU.

Trans-Pacific PartnershipTrans-Atlantic Trade & Investment Partnership

Global Opportunities

• Potential for enhanced access to 12-country market where 2013 exports totaled more than $32 billion

• Negotiations lookingto concludesometime thisyear

• Potential plastics industry tariff savings of $465M

• Seven rounds of negotiations concluded

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