Experts in the plastics industry have recently predicted that the global consumption will reach a level of 250 million tones by 2010 from the level of 140 million tones in 1999. The average growth of 5.5% is expected during the forthcoming decade.Is this figure really realistic or achievable? Before we analyze the reasons for such optimism, let us understand the 1999 consumption pattern of plastics.
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The large volume plastics comprising of Polyolefins, PVC and Polystyrene have reached a level of 113 million tones and thus have almost 80% share of the total consumption. PET that has achieved its premier position in rigid packaging adds another seven million tones. All these large volume plastics have 85% share of the total consumption. All other plastics contribute only 20 million tones and therefore have only 15% share of the total consumption. In fact, their share of the total plastics consumption has remained at this static level over the last decades. The experts earlier had predicted that these other plastics would grow faster compared to the commodity plastics. The innovative developments particularly in Polyolefins have widened their application segments. Besides packaging and infrastructure are the two major drivers of plastics where commodity plastics are preferred on account of cost effectiveness. Indeed these commodity plastics will continue to drive the growth of plastics in the coming decade.
The historical consumption pattern over the last four decades illustrates that the average growth of 8.2% has been achieved from 1960 until 1999.
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It is therefore not very difficult to expect a growth rate of 5.5% that is required to reach a level of 250 million tones by 2010. However, closer analysis during different decades indicates that the growth of plastics has been dropping from 16% in 60s to almost 4% in the last decade of 90s. It can be argued that two major economic recessions, one in the early 90S and the later one of 1997-99 on account of Asian financial crisis were responsible for lower growth in the last decade. The growth could have been higher in the absence of these factors. Two of the emerging economies like China and India alone are expected to contribute almost 35 million tones of additional consumption (almost 30% of the additional consumption of 110 million tons). In fact, Asian region is expected to be a driver of growth in plastics in the coming decade. Plastics have always grown faster than the economic growth. If the remaining regions continue to show a demand elasticity of 1.25 (i.e. plastics growth at 1.25XGDP), it would not be very difficult to attain the figure of 250 million tones by achieving an average growth of 5.5%. On the other hand, if the growth rate continues to show a level of about 4% that has been seen in the last decade possibly due to the maturity of the market, the expected consumption could reach a level of about 215-220 million tones. Plastics are essential materials for economic development and should be required at higher levels in those regions such as Asia, Latin America & Eastern Europe. Japan that has remained almost stagnant during 90s could add more to the growth of plastics if its economy improves. North America, a leader in plastics consumption is expected to exploit the new innovations such as Metallocene Polyolefins faster and thereby contribute to the plastics growth at higher levels. These positive signals may not be sufficient to counter the effect of maturity, but certainly could add about 10 million tones to the most conservative figure of 215 million tones. The global consumption of 225 million tones in 2010 with about 4.5% average growth, therefore, is certainly realistic and achievable.