The China syndrome
Anyone attending a major chemical or pharmaceutical exhibition in the last couple of years can have little doubt about the growing influence of manufacturers in the emerging markets of China, India, Eastern Europe and Latin America. Indeed, at last month's informEx show in Orlando, 43% of exhibitors came from outside the US, with the Chinese contingent of 76 companies accounting for almost three times as many as any other country except the US and more than the UK, Italy, Japan and Germany put together.
The challenge posed by lower-cost economies is something that manufacturers in the developed world are going to have to face up to - and sooner rather than later. In the 2005 Business Outlook Survey conducted by SOCMA among its members, the impact of competition from emerging markets ranked alongside the state of the overall chemical industry and just behind energy prices as a major factor influencing their business, while 42% of respondents believed their sales had decreased as a result of competitive pressure from China and India.
And although an emphasis on reliability and quality was seen as the best approach for dealing with the competition, the number of respondents who thought that emerging market suppliers were at least as good as established market suppliers rose to 48% from 39% the previous year.
Like any commercial organisation, exhibition companies are looking to exploit the potential offered by the emerging markets, and CMPi's decision to extend the informEx brand beyond the US into China is logical. But several exhibitors expressed reservations about the strategy.
CMPi already has an exhibition in China, albeit at a different time of year and in a different part of the country. The organiser was keen to stress its intention to preserve the unique character and atmosphere of informEx, but will the all-inclusive, networking concept really translate satisfactorily into such a different business environment? And is an exhibition the best route to finding a potential manufacturing or research partner anyway?
Nor is CMPi the only event organiser with China in its sights. Although it is a vast country with a huge population, a number of exhibitors at informEx remained to be convinced about the shows' attractiveness to an international audience. CMPi, with its hugely successful track record in this sector, must surely have a powerful rationale behind its strategy in the emerging markets. Let's hope its confidence is well placed.