Chianti, espresso, grappa, lakes and mountains – Italian lifestyle lent a certain amount of flair to the recent plastics and packaging exhibitions in Milan. Even if the economic crisis was omnipresent and predictions of an upswing were nowhere to be heard, the spring-like atmosphere at the fairgrounds hosting the “Inpack Ima”, “Grafitalia” and “Coverflex” packaging exhibitions and the “Plast 09” plastics show (www.plast09.org) made one feel as if things should be looking up. The bi-annual forecast published by the Italian chemical industry federation Federchimica (www.federchimica.it) in February reflects this optimism. It predicts that the Italian industry could experience a slight upturn in the second half.

Before the downturn reverses into an upturn, the full extent of the slump will undoubtedly become visible. Consolidation is the market’s watchword at the moment – separating the “wheat from the chaff.” The increasing number of companies filing for insolvency bears this out. Italy's gross domestic product (GDP) is expected to contract by 1.3% in 2009, following a decline of 0.4% in 2008. The construction, automotive and domestic appliance sectors are not performing well at all, and Italy’s entire industrial sector as a whole is faring far worse than Germany’s, for example. The country has been in recession for some time, data published by the European statistics office Eurostat clearly shows. While the downturn in German industry only started in mid-2008, Italian production began its steady descent in the beginning of 2007 and went into free-fall in autumn 2008.

Federchimica expects European chemical output to drop by 2% on average this year, but says the downtrend will be sharper in Italy, with a forecast decline of around 2.4%. The chief cause is the recession in the construction sector, which is expected to contract by 4.7%. Italy’s plastics industry should not do quite as badly as the chemical sector as a whole. The expectation is that it could contract by 2% in 2009 compared with 3.5% in 2008. The chemical industry association predicts that the general destocking will tail off towards the end of the first half year, leading to a slight uptrend. Consequently, it suggests that companies should not base their forecasts for 2009 on the dramatic downturn in the fourth quarter of 2008.

Based on figures for the first nine months of 2008, Federchimica calculates a dramatic setback for plastics processing last year. It estimates that plastics consumption slipped by 5% to 7.1m t. This backs up data published by market research group PlasticsEurope (Brussels / Belgium, www.plasticseurope.org), which estimates that Italian consumption of standard and engineering thermoplastics was around 7.6m t in 2007. Domestic output is believed to have dropped by 3% but as Eurostat does not provide data for all types of plastics, it is difficult to analyse the situation accurately.

The downtrend affected all types of polymers processed. Polyethylene has been suffering from the weakness of the Italian construction industry. Consumption of LDPE contracted by 3.3% last year, while HDPE use receded by 3.1%. The only segments to have escaped the downturn are extrusion coatings and large containers. PP has been hit even harder than PE – here, consumption plummeted by 4.6% across all applications. PVC declined 5.7%, principally because of low demand from the construction industry and the slump in the market for cast sheeting. Flexible PVC, for example for cable coatings, proved only proved marginally more stable, registering a decline of 4.2%.

Polystyrene consumption decreased by 3.3% while EPS dropped 2.7% due to low demand for disposable products, consumer durables and EPS packaging. PET has been the least affected by the crisis, with consumption down only 2%. Recessive influences in this market have been exacerbated by a reduction in bottle weight and a increased imports of pre-packaged fruit and vegetables.

Polyamide, where consumption fell 5.9% last year, has been worst hit by the downturn, due to its widespread use in a number of “problem” sectors, including automotive, construction and domestic appliance applications. Consumption of polyurethanes plunged almost equally far, losing 5.7% as a result of lower output of vehicles and domestic appliances.

There is little new to say about the Italian plastics machinery sector – see Plasteurope.com of 03.03.2009. The peripherals segment, which is dominated by small businesses, is holding up well, while manufacturers of core machinery and especially injection moulding machines find themselves caught between low-cost Asian suppliers on the one hand and poor quality and lack of innovation on the other. So far, Sandretto, Negri Bossi and their compatriots have been kept alive by a combination of national pride and state subsidies.

In view of Italian industry’s homemade problems and the general economic crisis, the number of exhibitors and visitors to Plast 09 plastics was surprisingly stable. According to the organisers, the triennial exhibition attracted around 55,000 visitors, only 10,000 fewer than in 2006. Some 67% of visitors were from Italy. Altogether 1,478 exhibitors showcased their products on 60,000 m² of exhibition space, just 5,000 m² less than at Plast06, which attracted 1,551 exhibitors. In 2009, around 80% of exhibitors were producers of machinery and peripherals. In this respect the show is on a par with Germany's “Fakuma” exhibition in Friedrichshafen – except, of course, that Fakuma attracts only 40,000 visitors. Looking ahead, the next “K” plastics fair in Düsseldorf / Germany is likely to be held under luckier auspices – the worst of the crisis should be over by then.