The European market for plastic colorants had revenues of EUR 292.6m in 2005 and is forecast to reach EUR 339.3m in 2012, according to the recent report, "European Markets for Plastic Colorants", by management consultant Frost & Sullivan (London / UK; www.chemicals.frost.com).

The report notes that in recent years European plastic processors have shifted their business to Asia to benefit from cost advantages and capitalise on market growth in the region. This has adversely affected the European masterbatch and colorants industry, which has lost customers to Asia and has become more competitive, price-driven and therefore less profitable.

To a large extent, the consultants say, the expansion of the European plastic industry is driving the plastic colorants markets. High-performance applications are providing opportunities to European pigment producers and allowing them to distinguish themselves as technology leaders. At the same time, however, Asian producers of organic pigments typically charge EUR 2-3/kg less. The price gap is thus likely to lead European players to acquire or form alliances with Asian competitors and shift production to East Asia. For those remaining in Europe, product innovation will become essential if they want to remain competitive.