BOPP
Asia dominates BOPP film market / Global demand 2.4m tonnes / New report highlights trends
The BOPP film industry has been one of the most dynamic and fast growing sectors of the plastics packaging industry in recent years. The use of BOPP film has grown from a small specialist market originally developed as a replacement for cellulose film, to one which has carved out whole new market applications and uses. A wide variety of technical and economic factors have contributed to this success, ranging from BOPP´s combination of properties to the development of new consumer trends and tastes. The film´s stiffness, good printing and coating surface, and reasonable barrier properties as well as the creation of markets for multi-packs of crisps and snacks, bakery products, and pasta have resulted in a global market which now uses some 2.4 million tonnes of BOPP film annually. Furthermore this market is expected to continue showing significantly strong growth such that over the next ten years consumption is expected to nearly double again.
The factors which lie behind this development are analysed in a new global study from AMI Consulting (GB-Bristol) which looks at the world market for BOPP films. The report highlights the particularly rapid growth in the use of BOPP films in Asia. This region has already emerged as the largest market, outstripping Western Europe and North America, and in 1998 accounted for 28.5% of volumes consumed compared with 19.7% in 1990. Annual average increases in demand have been running at over 16% per year, and this takes into account the recession which affected much of the region since 1997. The market in Asia has also been constrained by relatively high usage of PET films, which are sold competitively with BOPP films because of overcapacity in the region.
The strength of the BOPP film market through the Asian recession can be partly explained by the growth in China, which was less affected by the downturn. There has been phenomenal increases in capacity in this country, with a plethora of new, relatively small operating units springing up throughout the 1990s. In its report AMI identifies 44 producers of BOPP film in China, with an average throughout per plant of just 6,500 tonnes.
The increase in capacity in China, distributed among a large number of small players, is indicative of some of the problems the industry now faces with oversupply. AMI estimates for 1998 that global BOPP capacity stood at over 3 million tonnes, with production levels running at 80% of this. Although this is an industry which is regarded as having high levels of supplier consolidation, looked on a global scale this is far from the reality. The market share held by the 10 largest companies has actually declined over the course of the 1990s. Throughout that time Mobil Plastics has remained the largest and is the only one that can probably be considered truly global. Even so its plants are primarily concentrated in North America and Europe, although it does have a stake in a plant in Thailand, and has numerous marketing agreements around the world.
There have been various attempts throughout the 1990s at restructuring, but problems of valuation have tended to prevent the more ambitious mergers, such as those proposed between Mobil Plastics and Hoechst Trespaphan and AET and Moplefan. An increasingly competitive market, low capacity utilisation rates (especially in North Amenica) and increased investment costs and demand for capital are though likely to drive the need for further supplier consolidation, particularly in the more developed markets of North America, Western Europe and Japan.
The outlook for the industry therefore is one of strong growth opportunities but challenging business conditions for suppliers. As larger players emerge this may force some market discipline which will result in improved utilisation rates in the future. AMI forecasts an average growth rate of nearly 8% per year for the period up to 2007 worldwide. Asia, the Middle East and India are though expected to show market growth above this level.
READER SERVICE: Contents pages for the AMI study “The World Markets for BOPP Films”: PIE-No. 44363.
The factors which lie behind this development are analysed in a new global study from AMI Consulting (GB-Bristol) which looks at the world market for BOPP films. The report highlights the particularly rapid growth in the use of BOPP films in Asia. This region has already emerged as the largest market, outstripping Western Europe and North America, and in 1998 accounted for 28.5% of volumes consumed compared with 19.7% in 1990. Annual average increases in demand have been running at over 16% per year, and this takes into account the recession which affected much of the region since 1997. The market in Asia has also been constrained by relatively high usage of PET films, which are sold competitively with BOPP films because of overcapacity in the region.
The strength of the BOPP film market through the Asian recession can be partly explained by the growth in China, which was less affected by the downturn. There has been phenomenal increases in capacity in this country, with a plethora of new, relatively small operating units springing up throughout the 1990s. In its report AMI identifies 44 producers of BOPP film in China, with an average throughout per plant of just 6,500 tonnes.
The increase in capacity in China, distributed among a large number of small players, is indicative of some of the problems the industry now faces with oversupply. AMI estimates for 1998 that global BOPP capacity stood at over 3 million tonnes, with production levels running at 80% of this. Although this is an industry which is regarded as having high levels of supplier consolidation, looked on a global scale this is far from the reality. The market share held by the 10 largest companies has actually declined over the course of the 1990s. Throughout that time Mobil Plastics has remained the largest and is the only one that can probably be considered truly global. Even so its plants are primarily concentrated in North America and Europe, although it does have a stake in a plant in Thailand, and has numerous marketing agreements around the world.
There have been various attempts throughout the 1990s at restructuring, but problems of valuation have tended to prevent the more ambitious mergers, such as those proposed between Mobil Plastics and Hoechst Trespaphan and AET and Moplefan. An increasingly competitive market, low capacity utilisation rates (especially in North Amenica) and increased investment costs and demand for capital are though likely to drive the need for further supplier consolidation, particularly in the more developed markets of North America, Western Europe and Japan.
The outlook for the industry therefore is one of strong growth opportunities but challenging business conditions for suppliers. As larger players emerge this may force some market discipline which will result in improved utilisation rates in the future. AMI forecasts an average growth rate of nearly 8% per year for the period up to 2007 worldwide. Asia, the Middle East and India are though expected to show market growth above this level.
READER SERVICE: Contents pages for the AMI study “The World Markets for BOPP Films”: PIE-No. 44363.
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30.06.2000 Plasteurope.com [17300]
Published on 30.06.2000