CHANGING STRUCTURES IN THE NORTH
AMERICAN PLASTICS INDUSTRY
- FROM LOCAL TO GLOBAL INFLUENCES -
Applied Market Information Ltd.
45-47 Stokes Croft
Bristol, BS1 3QP, UK
Tel: +44 (0)117 9249442
Fax: +44 (0)117 9892128
Email: consult@amiplastics.com
www.amiplastics.com
Applied Market Information LLC
1210 Broadcasting Road, Suite 103
Wyomissing, PA 19610, USA
Tel: +1 (610) 478 0800
Fax: +1 (610) 478 0900
Email: consult@amiplastics-na.com
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 2
The programme
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About Applied Market Information
Where North America fits in the world
The position of North American demand
Downstream industries and changing structures
Global Flexible Packaging markets – the PE example
Consumer trends impacting plastics
Retailer trends impacting plastics
Conclusions
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 3
About AMI Consulting
 Market Analysis
– In-depth multi-client reports
 The NAFTA market for Thermoplastic




Concentrates (March, 2012)
The Global Market for BOPP films
The Global Market for Grass Yarns
Studies by application e.g. Pipes,
membranes, cables
Studies by polymer e.g. PP, PE
– Single client projects and reports
 Market & Database products
– Plastics in India
– The Thermoplastic Compouding
Industry Report (NAFTA, Europe,
Asia, Latin America)
– Processor & compounder databases
 Conferences
–
–
–
–
–
–
–
 Other
 Digital magazines
– Compounding World, Injection
World, Film & Sheet, Pipe & Profile
 E-publishing contract services
 Technical publications
4
©Applied Market Information Ltd 2013
Compounding World Forum
AMI Plastics Industry Seminar
Shrink and Stretch film
Thermoplastic Concentrates
Polyethylene Films
Fire Retardants in Plastics
Polymers in Cables
AMI Consulting




AMI has over 25 years experience
in providing insight and information
to the global plastics industry.
AMI has databases on over 30,000
plastic processors globally
AMI has unrivalled knowledge on
down stream plastics markets
Applied Market Information LLC
©Applied Market Information Ltd 2013
5
AMI Future Events
The international marketing, business
and technical conference for the
polyethylene film industry
11-13 February 2014
The Shores Resort & Spa,
Daytona Beach, FL, USA
Organized by Applied Market Information
LLC
Applied Market Information LLC
©Applied Market Information Ltd 2013
6
AMI’s Digital magazines
www.filmandsheet.com
Applied Market Information LLC
©Applied Market Information Ltd 2013
www.pipeandprofile.com
7
www.injectionworld.com
WHERE NORTH AMERICA FITS IN THE
WORLD
Evolving patterns of demand
The trends that shape the world
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Global population growth to 9.2 billion by 2050
– With an increasing share living longer and requiring greater services
Urbanization as more of the population moves to cities
– By 2050 65% of the world population will be city dwellers
Transport needs will mean over 2.5 billion cars are needed by 2050
The fight to access resources:
– Raw materials to drive industrial development

– The basics of life water and food
– Energy and power needs will have grown by 50% from the levels of 2012
Energy efficiency and resource optimisation will be essential drivers in
the globally successful economies
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 9
Total polymer demand by type 1983-2017
700,000
600,000
Polyethylene
PVC
Expanded Polystyrene
PET
Polypropylene
Polystyrene
ABS
Engineering polymer
million lbs
500,000
400,000
300,000
200,000
100,000
0
1983
Western Plastics Association
©Applied Market Information Ltd 2013
1998
2012
2013
2017
Slide 10
The World 1983 and 2012
2012
1983
Africa and the
Indian Sub Middle East
Continent
4%
Asia 1%
17%
Europe
38%
Africa and the
Middle East
9%
Indian Sub
Continent
5%
Europe
20%
Asia
15%
Greater China
6%
NAFTA
17%
Latin America
4%
NAFTA
30%
98.8 million lbs
Western Plastics Association
©Applied Market Information Ltd 2013
Latin America
5%
Greater China
29%
496.9 million lbs
Slide 11
Total world demand 1983-2017
700,000
600,000
Europe
Latin America
Asia
Africa and the Middle East
NAFTA
Greater China
Indian Sub Continent
million lbs
500,000
400,000
300,000
200,000
100,000
0
1983
Western Plastics Association
©Applied Market Information Ltd 2013
1998
2012
2013
2017
Slide 12
Global polymer demand 2012
Engineering
polymer
PET
3.8%
8.7%
ABS
3.5%
Expanded
Polystyrene
2.2%
Polyethylene
34.6%
Polystyrene
6.1%
PVC
16.9%
Polypropylene
24.2%
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 13
End use applications for all polymers 2012
Sport and Leisure
1%
Furniture
Toys
1%
Housewares
1%
3%
Medical
1%
Electrical
Appliances
5%
Automotive
3%
Agriculture
2%
Building
20%
Western Plastics Association
©Applied Market Information Ltd 2013
Flexible
Packaging
Industrial
7%
Others
11%
Flexible
Packaging
Consumer
17%
Rigid Packaging
Industrial
6%
Rigid Packaging
Consumer
22%
Slide 14
Total NAFTA demand 1983-2017
120,000
100,000
Million lbs
80,000
Polyethylene
Polypropylene
PVC
Polystyrene
Expanded Polystyrene
ABS
PET
Engineering Polymer
60,000
40,000
20,000
0
1983
Western Plastics Association
©Applied Market Information Ltd 2013
1998
2012
2013
2017
Slide 15
Total NAFTA demand 1983-2017
Units: million lbs
1983
1998
2012
2013
2017
Polyethylene
13,272
30,640
34,673
35,467
40,075
Polypropylene
3,526
13,444
15,626
16,067
18,232
PVC
6,094
13,962
13,427
13,619
14,399
Polystyrene
3,758
6,083
4,728
4,761
4,904
Expanded Polystyrene
496
937
1,358
1,395
1,492
ABS
904
1,631
1,713
1,770
1,940
PET
551
4,188
10,238
10,612
12,100
886
29,487
2,513
73,398
4,033
85,795
4,232
87,922
4,963
98,105
Engineering Polymer
Total
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 16
Dynamics of the NAFTA market
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Highly evolved market dominated by USA economy
– Mexico the faster growing area
2012 characterised by:
– Acceleration of domestic demand
– Profitability maintained
Evidence of renewed acquisition activity in processing industry
Renewed confidence in domestic manufacturing of both resin and
plastics processing; shale gas driven
Global investments continuing, driven by the desire to serve brands on a
global basis
– Importance of retailers in encouraging low cost goods from around the world
– Continued global investments by US companies
North American resin and additive companies continue to be at the
forefront of global development
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 17
Downstream industries and their changing
structures
The plastics industry in 2013
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Plastics processing is successfully established in every region and
country of the world
The impact of plastics products and goods is felt in every economy
and society on the planet
The average consumer relies on and uses numerous distinct plastics
products every day
Plastics drive the global economy
–
–
–
–
–
Building and infrastructure
Communications
Transport
Packaging of all consumer goods (rigid and flexible)
Leisure and social activities
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 19
Development of the processing industry
Pre 1970’s
1970’s-1980’s
1980’s- 1990’s
2000’s-2010
Western Plastics Association
©Applied Market Information Ltd 2013
Local production
National and regional processors
Interregional processors
In same
time resin
producers exit
processing and
financial
groups
take larger
holdings
Global dimension
Slide 20
Global distribution of processors 2013
Indian Sub
Continent
15.4%
Africa and
Middle East
5.6%
Europe
13.2%
NAFTA
7.1%
Latin America
5.9%
Asia
18.6%
Greater China
34.2%
Total number 196,255
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 21
Global processors by activity 2013
Compounders
2.5%
Cable Sheet Other
2.1%
0.9% 2.3%
Profile
4.7%
Pipe
2.6%
Film
14.6%
Rotational
Moulding
0.9%
Blow Moulding
7.9%
Injection
Moulding
61.5%
Total Number 196,255
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 22
Processor industry structure 2013
% of processor numbers
% of polymer demand
Africa and
the Middle
East
Indian Sub
8.5%
Continent
5.2%
Europe
20.5%
Indian Sub
Continent
15.4%
Africa and
Middle East
5.6%
Europe
13.2%
NAFTA
7.1%
Asia
14.8%
Latin America
5.9%
NAFTA
17.3%
Greater China
28.8%
Western Plastics Association
©Applied Market Information Ltd 2013
Latin America
5.0%
Asia
18.6%
Greater China
34.2%
Slide 23
Global distribution of plastic processors 2013
Injection
Blow
Rotational Polyolefin
Moulding Moulding Moulding
Film
Pipe
Profile
Cable
Sheet
Thermoplastic
Other
Extrusion Extrusion Producers Extruders Compounders Processors
Grand
%
Total
Share
Europe
16,525
1,735
321
2,099
778
1,394
477
1,046
762
690
25,827
13.2%
NAFTA
9,000
905
220
1,080
230
855
205
505
580
300
13,880
7.1%
Latin America
6,294
817
38
2,463
151
659
76
463
271
294
11,527
5.9%
Greater China
45,500
4,890
180
10,935
645
2,185
310
625
1,075
745
67,090
34.2%
Asia
17,460
4,055
355
6,705
1,165
3,190
530
1,055
995
1,080
36,590
18.6%
Indian Sub Continent
20,100
1,975
310
4,015
1,750
145
110
425
962
505
30,297
15.4%
Africa and Middle East
5,850
1,185
343
1,323
300
702
156
349
295
541
11,044
5.6%
120,729
15,562
1,767
28,620
5,019
9,130
1,864
4,468
4,940
4,155
196,255 100.0%
61.5%
7.9%
0.9%
14.6%
2.6%
4.7%
0.9%
2.3%
2.5%
2.1%
100.0%
Total
% share of total
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 24
The plastics industry in NAFTA
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Industry dispersed in all countries
– Strong structure in United States
– Developed industry in Canada
– Rapidly evolving industry in Mexico
Many companies but limited resources
– The average company have limited management skills and resources
Consolidation in the last ten years
–
–
–
–
Takeovers and mergers driven by specialisation
Consolidation of the customer base
Movement of business to Asia and developing world
Future of equity owned assets uncertain
Specialization increasing
Number of truly National players
– Few with truly global ties
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 25
Distribution of processors NAFTA 2013
Injection
Blow
Rotational Polyolefin
Moulding Moulding Moulding
United States
Film
Pipe
Profile
Cable
Sheet
Plastic
Other
Extrusion Extrusion Producers Extruders Compound Processors
Grand
%
Total
Share
7,150
570
160
545
140
545
145
380
495
200
10,330
74.4
Canada
525
165
30
110
60
160
35
60
50
70
1,265
9.1
Mexico
1,325
170
30
425
30
150
25
65
35
30
2,285
16.5
GRAND TOTAL
9,000
905
220
1,080
230
855
205
505
580
300
13,880
100.0
% share of total
64.8%
6.5%
1.6%
7.8%
1.7%
6.2%
1.5%
3.6%
4.2%
2.2%
100.0%
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 26
The structure of the North American industry
Others
Sheet Compounders 2%
4%
5%
Cable
1%
Pipe and Profile
8%
Rotational
Moulding
2%
Polyolefin Film
6%
Blow Molding
6%
Western Plastics Association
©Applied Market Information Ltd 2013
Injection Molding
66%
Slide 27
Global flexible packaging markets
-the Polyethylene example-
Packer, Retailer, Consumer – meeting many needs
Preservation
and
protection
Range of
retailer
formats
Consumer
appeal
Product
Information
Sustainability
Supply chain
efficiency
• Freshness and food value
maintained
• Pack integrity in supply
chain
• Clear brand identity
• Range of colours & effects
Western Plastics Association
©Applied Market Information Ltd 2013
• Stored safely with minimal
space
• Identity and impact on the shelf
• Differentiation on the shelf
• Easy to carry and transport
• Strong and Robust
• Light weight
• Easy to open & reclose/seal
• Easy to carry
• Easy to identify for recycling
• Meets packaging waste
requirements
Slide 29
Global size of market
Africa &
Middle East
Indian Sub
8%
Continent
5%
Europe
23%
Asia
15%
NAFTA
19%
Greater China
23%
Total market 115 billion lbs
Western Plastics Association
©Applied Market Information Ltd 2013
Latin America
7%
Slide 30
Global distribution of PE extruders 2013
Africa and
Middle East Europe
Indian Sub
5%
7% NAFTA
Continent
4%
14%
Latin America
9%
Asia
23%
Greater China
38%
Total number of
companies 28,620
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 31
Average film producer throughput 2012
NAFTA
Europe
Africa & The Middle
East
Latin America
Greater China
Asia
Indian Sub Continent
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
Million lbs
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 32
18.00
Base substrate demand – trends and comments




PE Film market is a 84 billion lbs.
Others
market globally accounting for over
PET
4%
half of world PE demand, future
PP film 6%
3%
growth globally 4.5% per annum
PP Film market is a 19 billion lbs.
market global market growing at
BOPP
over 6% per annum
14%
Other films and plastic substrates
account for over 11 billion lbs. and
are growing at over 7% per annum
Strong regional focus to most
Polyethylene
markets, but with trade increasingly
73%
influencing markets
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 33
Increased specialisation and focus
Technology Advances




Materials - wide range of polymers
and copolymers
Innovation in additives and
modification
Extrusion - more sophisticated
processing (co-extrusion)
Conversion
– Improved printing (more colours
greater print definition)
– Pack making (specialized shapes
and structures)
– Lamination
Western Plastics Association
©Applied Market Information Ltd 2013
Impact on Extruders




Need to understand new materials
- training and investment
Investments in co-extrusion often
necessary to fully exploit palette of
materials
Co-extrusion often the route to
achieve downgauging and superior
performance
Development of new products
essential to justify investment
Slide 34
Key drivers of packaging growth

Environmental
– Recycling

– Minimisation
Cost savings
– line speed/filling speed improvement often related to sealing time
– Greater pack integrity

– Down gauging
Others
– Reclosability
– Tamper evidence
– Excitement!
– Barrier properties
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 35
Case study of the opportunity: Labels
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Pressure Sensative
Glue Applied
Plastic
Western Plastics Association
©Applied Market Information Ltd 2013
IML
Sleeves and Others
Paper
Slide 36
Case study of the opportunity: Sacks
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Europe
NAFTA
Asia
Polyethylene
Western Plastics Association
©Applied Market Information Ltd 2013
Latin America
Polypropylene
Japan
Rest of the
World
Paper
Slide 37
Consumer trends impacting
the plastics industry
Profits from forecasting and understanding
Future behaviour and attitudes
Future needs
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 39
How are our lives changing?
Time is money
“instant
convenience”
Healthy lifestyle
choices
Appealing to
the young at
heart
How are our lives
changing?
Individual as a
market
The natural
world
Communications
age
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 40
True value propositions
Can I offer elements of uniqueness?
Do my products contribute to the
uniqueness of the brand?
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 41
Retailers and brands and their
influence on market development
Retailer brand issues/challenges
 Shorter product life cycles
– More product variants
 Environmental challenge
 Rise of private label
– Walmart private label $135 billion
– Nestle is a $98 billion company
 Need for brand protection
 How to sell in an interactive world
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 43
Retailers & Consumers
What is a brand?
Promise
How does it look
Experience
How does it work
Memory
What brings you back
Western Plastics Association
©Applied Market Information Ltd 2013
Aesthetic appeal
Environmental impact
Functionality
Slide 44
What drives innovation
What’s
Needed?
Consumer
Competition
Stakeholders
Western Plastics Association
©Applied Market Information Ltd 2013
What’s
Possible?
Innovation
Technology
Chemistry
Materials
Processes
Business Model
Supply Chain
Slide 45
Summary and
conclusions
Observations – Market overview


The footprint and influence of plastics products are now global in scope and
contribute to all areas of industry and the economy
Although we are slowly seeing a global industry emerge in many markets
the extent of globalisation is limited:
– Few global standards exist
– Resin availability and its pricing remains regional




The activities of global brands, combined with modern technology, are the
major factors reshaping the structure of the upper levels of the processing
industry. A limited number of players are adapting to this circumstance
The demand for plastics are also developing under the influence of
economic, environmental and an increasingly political/legal frameworks.
Stronger growth is occurring in the more populous developing economies of
India and China. Other countries joining this group are Russia, Brazil and
Indonesia.
All around the world the opportunity to replace traditional material is strong
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 47
Observations – industry structure






The processing industry continues to be extremely fragmented with the faster
growing regions of the world seeing the number of processors advance while
the more developed world is seeing a decrease in processor numbers.
Within each major region and also on a global scale the larger processors are
gaining an increasing share of the overall market. This process is most
advanced in the NAFTA region where a single market has existed for many
years, but similar trends are observable in the other regions.
Thus in the future the industry shape will be characterised by:
– The big will get bigger, the small entrepreneurial and focused supplier will remain
– The medium size processor will be challenged
“Disruption” will be the characteristic of markets to an increasing extent
As larger groups improve their profitability, access to capital and strong
balance sheets, this will drive a further process of company acquisition and
restructuring
Energy costs are emerging as a longer term driver of processing location
Western Plastics Association
©Applied Market Information Ltd 2013
Slide 48
THE END
www.amiplastics.com
Applied Market Information Ltd.
45-47 Stokes Croft
Bristol, BS1 3QP, UK
Tel: +44 (0)117 9249442
Fax: +44 (0)117 9892128
Email: consult@amiplastics.com
Applied Market Information LLC
1210 Broadcasting Road, Suite 103
Wyomissing, PA 19610, USA
Tel: +1 (610) 478 0800
Fax: +1 (610) 478 0900
Email: consult@amiplastics-na.com
Attendees to this seminar are reminded that the contents are copyrighted and that the
copyright belongs to Applied Market Information Ltd. and/or its subsidiaries. Unless
otherwise agreed and confirmed by Applied Market Information Ltd. in writing, it is
forbidden to distribute the contents to any third parties or transmit it via any electronic
medium forum.
Applied Market Information Ltd.
AMI House, 45-47 Stokes Croft
Bristol BS1 3QP, UK
Tel: +44(117) 924 9442
Fax: +44(117) 989 2128
E: consult@amiplastics.com
www.amiplastics.com
Applied Market Information LLC
1210 Broadcasting Road, Suite 103
Wyomissing, PA 19610 USA
Tel: +1(610) 478 0800
Fax: +1(610) 478 0900
E: consult@amiplastics-na.com
www.amiplastics.com
Andrew Reynolds: apr@amiplastics.com