BOPP FILM MARKETS
World BOPP film use tops 3m tonnes in 2001 / Leader in flexible packaging / AMI report
The world market for BOPP films topped 3m tonnes for the first time in 2001, according to the latest research from Applied Market Information (AMI, GB-Bristol; www.amiplastics.com). In the past 25 years the market for BOPP films has mushroomed from a specialist replacement for cellulose film accounting for a volume usage of less than quarter of a million tonnes, to one of the leading flexible plastics packaging materials, the report says. Having rapidly replaced cellulose films in applications such as crisps, snacks, confectionery and tobacco packaging, BOPP films have gone on to develop new markets in areas such as pasta and noodle packaging.
With the industry enjoying annual increases in the use of BOPP film in the region of 10% per year through most of the 1990s, AMI notes that inevitably there has been a similar increase in production capacity, which has led to oversupply in some regions. Despite strong growth in demand the industry has tended to suffer from poor margins as producers have aggressively sought to increase or protect their market share. The situation has been further exacerbated in Asia and Latin America, where overcapacity in PET film production has kept the price for these low, and has led to greater competition with BOPP films. AMI Consulting calculates that the average utilisation rate for BOPP film producers in 2001 was 82.4% with total capacity at more than 3.5m t.
While there have been attempts by the leading players to restructure and rationalise the business, this has not yet led to greater consolidation in a global context, according to AMI. The 10 leading producers in 2001 accounted for 39.6% of production compared with 45% in 1990. With the market still forecast to grow at 7% per year, the consultants still see plenty of incentive for new players to enter the business, despite the very significant costs of setting up BOPP film production. However, as competition increases, existing companies have been seeking to either enlarge their business to ensure competitive advantage or looking to quit the business altogether. This, AMI remarks, has provided opportunities for new players to enter the market via acquisition, as Dor Chemicals Ltd. (Haifa, 26110 Israel; www.dor-chemicals.co.il) has through its purchase of “Moplefan”.
As the packaging industry is becoming increasingly global and major food companies are seeking to deal with just a handful of suppliers that can operate on a worldwide basis, regional players will have to either specialise or consolidate, AMI warns. The outcome, it says, is likely to be a considerable shake-out among BOPP film producers over the next 10 years.
Over the past 10 years there have been some shifts in the relative importance of the leading BOPP film players, as the report points out. ExxonMobil Chemical Films Europe Inc. (formerly Mobil Plastics) has long been the world market leader in BOPP films although its market share has slipped, from 12.5% in 1990 to 7.7% by 2001. In contrast, the company which AMI now calculates as being the world´s second largest, Italy´s Vifan (www.vifan.com), is one that would not have featured among the leading players 10 years ago. It has grown through the 1990s thanks to investments in new plants in Italy, the USA and Canada, as well as expanding its existing operations.
According to AMI, there are currently more than 200 BOPP film plants around the world. The overall number of units has not changed significantly in the past three years, as the new plants that have been set up have been offset by some closures. However, while the number of operations may not have changed particularly, capacity increased by 20% between 1998 and 2001 and more than doubled through the 1990s.
The greatest increases in capacity have been seen in Asia, particularly China, where there has been a proliferation of small plants set up, often for in-house manufacturing of capacitor film, tapes, labels or packaging. While the industry in China is still highly fragmented, one or two larger scale players are starting to emerge, such as Foshan Plastic Group, which controls three plants in China. With the market potential so vast in China, most of these Chinese companies are primarily manufacturing to supply the local market. However, as AMI observes, these companies grow, so they will look for export opportunities. At present, exports of BOPP films from China are minor, and the country in fact has quite a significant import requirement.
The consultants expect that China will continue to be one of the more dynamic markets for BOPP film. Already the largest market in the world, in terms of both production and consumption, demand is forecast to grow by over 9% per year up to 2010. As a result, China alone will account for more than 1m t of BOPP film usage in a global market forecast by AMI to reach nearly 5.7m t in 2010. Other strong growth markets are expected to be India, the Middle East and eastern Europe, although in all cases these markets are developing from a much lower base. Growth in the larger, well developed markets of the US, western Europe and Japan is expected to average 4-6% in the period 2001-2010, reflecting the higher level of BOPP film usage already achieved in these regions.
With the industry enjoying annual increases in the use of BOPP film in the region of 10% per year through most of the 1990s, AMI notes that inevitably there has been a similar increase in production capacity, which has led to oversupply in some regions. Despite strong growth in demand the industry has tended to suffer from poor margins as producers have aggressively sought to increase or protect their market share. The situation has been further exacerbated in Asia and Latin America, where overcapacity in PET film production has kept the price for these low, and has led to greater competition with BOPP films. AMI Consulting calculates that the average utilisation rate for BOPP film producers in 2001 was 82.4% with total capacity at more than 3.5m t.
While there have been attempts by the leading players to restructure and rationalise the business, this has not yet led to greater consolidation in a global context, according to AMI. The 10 leading producers in 2001 accounted for 39.6% of production compared with 45% in 1990. With the market still forecast to grow at 7% per year, the consultants still see plenty of incentive for new players to enter the business, despite the very significant costs of setting up BOPP film production. However, as competition increases, existing companies have been seeking to either enlarge their business to ensure competitive advantage or looking to quit the business altogether. This, AMI remarks, has provided opportunities for new players to enter the market via acquisition, as Dor Chemicals Ltd. (Haifa, 26110 Israel; www.dor-chemicals.co.il) has through its purchase of “Moplefan”.
As the packaging industry is becoming increasingly global and major food companies are seeking to deal with just a handful of suppliers that can operate on a worldwide basis, regional players will have to either specialise or consolidate, AMI warns. The outcome, it says, is likely to be a considerable shake-out among BOPP film producers over the next 10 years.
Over the past 10 years there have been some shifts in the relative importance of the leading BOPP film players, as the report points out. ExxonMobil Chemical Films Europe Inc. (formerly Mobil Plastics) has long been the world market leader in BOPP films although its market share has slipped, from 12.5% in 1990 to 7.7% by 2001. In contrast, the company which AMI now calculates as being the world´s second largest, Italy´s Vifan (www.vifan.com), is one that would not have featured among the leading players 10 years ago. It has grown through the 1990s thanks to investments in new plants in Italy, the USA and Canada, as well as expanding its existing operations.
According to AMI, there are currently more than 200 BOPP film plants around the world. The overall number of units has not changed significantly in the past three years, as the new plants that have been set up have been offset by some closures. However, while the number of operations may not have changed particularly, capacity increased by 20% between 1998 and 2001 and more than doubled through the 1990s.
The greatest increases in capacity have been seen in Asia, particularly China, where there has been a proliferation of small plants set up, often for in-house manufacturing of capacitor film, tapes, labels or packaging. While the industry in China is still highly fragmented, one or two larger scale players are starting to emerge, such as Foshan Plastic Group, which controls three plants in China. With the market potential so vast in China, most of these Chinese companies are primarily manufacturing to supply the local market. However, as AMI observes, these companies grow, so they will look for export opportunities. At present, exports of BOPP films from China are minor, and the country in fact has quite a significant import requirement.
The consultants expect that China will continue to be one of the more dynamic markets for BOPP film. Already the largest market in the world, in terms of both production and consumption, demand is forecast to grow by over 9% per year up to 2010. As a result, China alone will account for more than 1m t of BOPP film usage in a global market forecast by AMI to reach nearly 5.7m t in 2010. Other strong growth markets are expected to be India, the Middle East and eastern Europe, although in all cases these markets are developing from a much lower base. Growth in the larger, well developed markets of the US, western Europe and Japan is expected to average 4-6% in the period 2001-2010, reflecting the higher level of BOPP film usage already achieved in these regions.
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25.07.2002 Plasteurope.com [15856]
Published on 25.07.2002