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Description
This paper explores the potential geographic expansion of a Publicly Listed Compostable Plastic Resins Company (D&L Industries) outside the Philippines to establish a country office that will manufacture compostable resins (Biorez). This narrative aims to produce data-driven analyses that utilize the microeconomic and macroeconomic concepts and models that will aid in the decision-making process of finding a suitable host country for expansion. The initial shortlist of ten candidate countries was chosen based on their proximity to the Philippines and recent advancements in waste management practices and adoption of environmentally friendly consumer materials. From this initial pool of candidates, a set of five key indicators was applied to identify the top two emerging countries for more in-depth analysis. The results ranked Vietnam and India as the two most suitable countries for expansion. Starting a company in the plastics industry entails high start-up costs, requires economically scaled production, and calls for tedious operation permit processing. Based on gathered data, a few companies hold a significant share of the plastics industry in both Vietnam and India. Further, several barriers are present which prevent a new company from entering the market. These market characteristics point to an Oligopolistic Structure. Given this context, profitability can be deduced since the short-run supply and demand would be relatively inelastic but in the long run, demand and supply are relatively elastic. To analyze each country’s market potential at a microeconomic level, a supply and demand curve was constructed based on estimated price and resin consumption in each country, as well as the demand and supply elasticities of the plastics industry obtained from references. The demand curve shifts brought about by changes in determinants such as Consumer Income, population decile, Taste and Preference, Substitutes, and Complementary Goods were studied. Consequently, shifts in the supply curve caused by determinants such as the price of inputs, government policy, technology, and related expectations were also observed. Distilling the significant contributing factor of success at the microeconomic level, the analysis showed that consumer acceptance, consumption, lower price of input, and conducive policies in Vietnam would prove more advantageous than in India. From the lens of macroeconomics, the dynamic variables investigated include GDP, Inflation, Unemployment, and Economic Freedom, while for static variables CPI, Ease of Doing Business, and Trade Openness. In long-term economic growth projections, it is expected that Vietnam and India have the potential to be the fastest-growing economies between 2016 and 2050. the momentum of the Inflation trend for Vietnam is downwards while for India it's upwards. But regarding the unemployment rate, both countries have a steady trend. Corruption Perception Index would make India a more favorable country than Vietnam. Expanding business operations to countries with higher Corruption Perception Index would reduce the reputational risk of encountering bribes and other anomalies. However, there is more to see from Trade Openness ratings, where Vietnam is more stable due to its higher dependence on imports and exports compared to India. Ultimately, the analysis revealed that government policies and regulations in Vietnam are notably more favorable compared to those in India. Therefore, it is recommended that D&L Industries expand its Biorez™ market presence in Vietnam. This country demonstrates significant growth potential and provides a favorable market environment for Biorez™. Establishing a country office and manufacturing plant for compostable resins in Vietnam is deemed a viable and strategic move.
| Conference Topic Areas | Track8: Design Optimization, Additive Manufacturing Technologies & Applications |
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