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Plastics flexible packaging is a very dynamic and
extremely competitve business. This is particularly in the commodity
monolayer films or simple 3 layer structures, providing an overall
protection with moisture barrier and inferior barrier properties
limiting shelf life.
The higher layers are growing at a higher pace
compared to the simple structures. These higher layers have introduced
barrier materials like EVOH, Polyamides and Speciality Polyester
such as PEN and PVDC, along with special copolymers of Ethylene
and Ionomers as tie layers. In fact, the dynamic change in lifestyle
of the growing younger generation in Asian countries like China
and India, has increased the scope of multi layer structures, including
Aluminium foil to enhance the barrier properties against Oxygen
and Carbon Dioxide etc.
With almost 40% of the global population and GDP
more than US$5 trillion at the purchase power parity, both India
and China are becoming very important global economic centers. It
is no wonder that the flexible packaging market in these two countries
alone, is growing at an average rate of 12-15%,
compared to about 6% globally. Despite the large mature market of
Japan, the Asian region is expected to grow between 8-10%. The developed
regions of North America and Europe are expected to grow at more
than 4%, significantly higher than their GDP growth.
While the actual global consumption in 2002, projected
by several industry experts may differ, it certainly is around 20
million tons. North America and Europe dominate the markets with
more than 50-55% share. It is therefore not very surprising that
the top 10 companies involved in plastics flexible packaging are
mainly from these regions.
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Bemis from USA is the largest producer with polymer
usage of almost 1 million tons. |
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Alcan, the European company, after acquisition of the
flexible business of another European company - VAW(Flexpac),
would be just behind Bemis at about 900-950KT of material
consumption in 2003. |
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Amcor flexible is the sole major company from Australia
in the top 10, with about 650-700KT material consumption. |
These companies have undergone dramatic changes
over the last 2-3 years, mainly due to:
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Acquisition of newer business (Clysar special shrink film business
of Dupont acquired by Bemis) or |
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Significant presence in the fast growing business region of Asia
(Flexpac having more than 70% business in China and other Asian
countries). |
The challenging market situation, to remain more competitive and
profitable, would continue to have an impact on the merger and acquisition
activities.
The plastics flexible packaging is dominated by Polyolefins mainly
from PE. It is estimated that PE has almost 75% share of the flexible
packaging market. BOPP and cast PP films would be responsible for
an additional 10-12 % share. The only other commodity polymer, with
a decent share (almost 5-7%) is PVC. Although the speciality barrier
resins are very crucial for the growth of the industry, they have
only 2-4% share in volumes. These specialty barrier resins are very
efficient and therefore are required at significantly lower levels,
though their contribution in the value of the packaging would be
much higher.
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