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tools Would 3.5 Times Imports of Plastic Injection Machines Lead to Industry Boom?
In the first 4 months of 1396 A.H.S (current solar Hijri year), the statistics show that, a massive investment has been made in 
plastic industry, and imports of plastic injection machines continue to be accelerated by domestic producers
  1397/05/12 - 09:10
 
Statistics on the import of plastic injection machines have triggered alarm for plastic manufacturers.
In the first 4 months of 1396 A.H.S (current solar Hijri year), the statistics show that, a massive investment has been made in plastic industry, and imports of plastic injection machines continue to be accelerated by domestic producers.
 
According to INIPA’s report, In June, the rate of injection machinery import by manufacturers was so high that the Rial value of it is 3.5 times more in comparison with the same period of time in last year (1395 AHS). This huge amount of import indicates that heavy investment has begun by the players of plastic product market in the country. This is expected to lead to a more competitive market for plastic products inside the country.

The statistics show that in the first 4 months of this year, more than 70 billion  and 684 million Tooman of plastic injection machines came into the country, which shows an increase of nearly 34 billion and 476 billion Tooman in compared with the same period last year. In other words, the import of plastic injection machinery increased more than twice in comparison to the first 4 months of 1395 (More accurately 2.05 times).
 
For the mentioned period of time, i.e. the first 4 months of this year, importers pay more than 3,245 Tooman for each Dollar which they cost for machine import, this amount is 3 times more than 3060 Tooman which was the Dollar price in the same period of time in 1395, this shows an average increase of 6.5%. This increase is not only the result of higher exchange rate, but also the relative increase in other costs, including warehouse and transportation of machinery, should also be considered for the import rate, with respect to the conversion of the Rial to the Dollar.



Low increase In Exports of Polymeric Raw Materials

Statistics shows the value of Polymeric raw materials exports during the first four months of this year is only 6% higher than the same period of time in the previous year, which is not a significant amount. Of course, compared with the 4-month figures, it should be noted that the value of exports of these materials in the  first 2-months of the current year was 12 percent less than the same period of time in 1395, but with increasing exports in June and July, Has been offset.
 
 
In total, exports of polymer materials in the 4 months of this year reached 4,501,800 million Tooman, and it is only 13% higher than in the same period of time in 1395, which was 3,972 billion and 700 million Tooman. Put it another way, if we consider the rising of Dollar prices in the conversion of the Rial value of the export-to-currency calculation, the increase in exports of raw polymer materials has not been increased significantly over the past four months compared to last year.
Polystyrene Exports Hit the Records

Despite the low growth in the export of polymeric raw materials in terms of prices, exports of polystyrene have had a significant record. In the first 4 months of this year, these white fine grains were brought in more than 37 million and 614 thousand dollars for the country, which indicate 71% of growth compared to last year''s 22 million and 25 thousand dollars.

Alternatively stated, exports of polystyrene have been in the best condition for the 4 months of this year and have made a great deal of money in this segment. Just in July, the value of polystyrene export was nearly 2.5 times higher than in the same period last year.

 
What is the place of Domestics Producers?

A look at the statics of export of raw polymer materials and the import of plastic injection machines statistics shows that although the investment of manufacturers on injection devices has increased significantly, this investment has not had an impact on the volume of polymeric materials exports.

That is to say, Petrochemical Companies still have eager to supply their products outside the borders. Of course, a petrochemical production unit would show a greater willingness to foreign customers than Iranian producers who would pay in Rials.

On the other hand, in the current situation, the Petrochemical companies have defined their target market for polystyrene products across the border. By considering this the following changes in the plastic products market are predictable for the coming month:

Due to the willingness of the Petrochemical companies for exports, the supply of polystyrene in domestic markets is confronted with restrictions. At the end, the expected increase in the cost of these white grains is not in a waste.

According to INPIA''s research on the imports and export statistics of the first four months of 1396, the vast investment of plastic products manufacturers on the import of injection machinery shows that as long as these devices are cleared by customs and installed and commissioned, we will see a big increase in the supply of finished products in the market, which will lead to rise of competitive product rates.

Hence, more investing on the plastics industry and the imports of new injection machines for manufacturers who supply their product directly to the domestic market is not reasonable and will be less profitable.

If producers of final plastic products do not take effective action to supply their products in international and foreign markets, the domestic market is expected to be saturated with products, as a result, prices will be suppressed, which ultimately leads to a reduction in the  profit margin of Manufacturers. 


Investment in the purchase of new machines will be less risky for the manufacturers who supply their products to other industries (such as industrial pipe manufacturers), but in the end, manufacturers should be able to predict the market before purchasing new machine
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