China, India and Indonesia are powering Asia's economic recovery this year prompting one economist to club the three to form Asia's "next growth triangle".
A recent report by CLSA, titled Chindonesia: Enter the Komodo, estimates that the three countries will generate $10 trillion of wealth for investors by 2015.
"Together, China and India are increasingly becoming the biggest marketplace for almost everything sold on the planet," writes Nicholas Cashmore of CLSA.
He is also calling for Indonesia's inclusion among the BRIC economies. "As a leading supplier of commodities, Indonesia is leveraged to the growth of Chindia," says Cashmore referring to China and India. "Indonesia is ready to rise in the world economic hierarchy and take its place alongside China and India."
The importance of the three countries is already evident in the polyolefins market. China's imports of polyolefins have soared in the first six months of this year providing much needed succour to the global market. HdPE imports were up 62% at 1.92m tonnes; ldPE up at 94% at 689,000 tonnes, lldPE up 52% at 1.13m tonnes and PP up 50% at 1.96m tonnes.
A fair bit of imports is probably being held as stocks and easy availability of credit has lured speculators to the polyolefins market. But three are not many who doubt that China's massive economic stimulus program has played a big role in boosting domestic demand.
Indonesian PE and PP demand are forecast to growth by at least 4-5% this year. "The last two months have been very good and all resin manufacturers are running at 90-100% of capacity," says Budi Sadiman of the Indonesian Olefin & Plastic Industry Association (INAPLAS). Support is coming in from all end-use sectors except automobiles, building and construction.
India was one of the few countries that did not see a drop in demand last year. And it should be easy to deliver a growth of at least 10% this year in PE and PP with the key drivers being the packaging and pipe sectors.
So watch out for 'Chindonesia' this year.