INDIA AND THE GLOBAL PLASTICS SUPPLY CHAIN, EMAP, LONDON 2004

Françoise Pardos, Pardos Marketing, February 2006

Plastics end-uses and applications

Plastics consumption is linked to the average Gross National Income, GNI. And it also grows faster than GNI. In 2000, an average GNI of $15,000 per capita, and more, means more than 60 kg of plastics per capita. An average per capita GNI of $2,500 or less means less than 15 kg per capita.

The world GNI per capita average of $ 5 700 in 2000, means average plastics consumption of 25 kg. In 2020, the average GNI of $ 6 800 per capita, will shifts to plastics consumption at over 70 kg per capita.

Plastics have been a success story, for their unique features:

Plastics truly are miracle materials, infinite combinations of various molecules, creating these multiple polymers, in the true heart of matter. The main characteristic of plastics is to offer a combination of many properties, none outstanding, but synergistic. Plastics can be both, flexible glass and transparent metal.

The definition of plastics in this paper only includes solid plastics.

The future demand for plastics is driven:

• By the continuing demand of the developed economies, slower, but based upon very large tonnage,
• By the build-up of the developing economies, a replay of the last thirty years, with latest innovations.

All plastics applications develop in the emerging economies, as a multiple in tonnage, by-passing all the intermediate steps of traditional materials, for the immediate choice of the latest all plastic solutions.

Forecasts in plastics rely on end-uses and applications.

Plastics end-using industries in 2004, in % of total plastics consumption are about split as follows: 

Among the end-using industries, the active applications

In packaging, the fastest growing applications:

• PET bottles with barriers
• BOPP films
• All barriers, with nano composites

The main trends in packaging are:

• More plastics packaging, glass, paper, metal, down
• Shift to flexible packaging, lighter packages
• Search for single materials
• More functional packaging, smart labels

Flexible packaging is the huge and fastest growing market, particularly for applications in food, beverage, consumer, healthcare, and industrial products.

Another driver for the packaging demand growth is the increasing use of PET resins instead of PVC and PP because the latter two are more expensive. With PP and PVC prices expected to continue to rise, many more packaging producers could switch to PET resins, not only for bottles but for wide-mouthed PET jars.

In building construction, there are:

• Huge demand in emerging countries
• Building and public works multiplied by 5, in China, India, Latin America.
• 180 000 km of new roads in China to 2020, for instance.

The main trends in building construction are:

• Polyolefins replacing PVC in pipes
• Growth of windows, not only PVC
• Applications for wood and fiber composites
• Geomembranes and public works
• Increasing uses for waste of mixed plastics

In the electrical and telectronics industries, E/E

Half the world requires electrical networks  
Demand for household first equipment everywhere
Major developments in telectronics, replacement and new, office, telephones, audio-visual, VDUs
More competition between plastics, PP and engineering plastics win

In automobile and other vehicle industries

The growing car industry, just for private cars, that was 53 millions in 2003 will be 100 millions in 2020, many with new energy.

More vehicles will be produced in the next 20 years than were manufactured in the previous 110-year history of the automotive industry. The past, present and future success of the private car is deeply linked to individualism. The love affair with automobiles is really a love affair with individual mobility. Why deny this deep motivation to emerging countries people, on the false ground that the rich have already polluted the planet?

The use of plastics per car will rise from 100 kg now, to 200 kg + in 2020, and cars will be lighter.

The fastest growing applications in cars are:

• Complete plastics inroads into gas tanks
• Complete plastics inroads under the hood
• Lights and glazing of plastics instead of glass
• Car bodies of plastics and new designs

There are many new ways for plastics in cars, like:

• Self-repairing bumpers
• New classes of smart plastics
• Coatings and films
• Paint-like finishes

In agriculture, there will be:

• Growth of more sophisticated techniques
• Fastest developments in films for greenhouses, tunnels, mulching, ensilage
• Both plain films and very functional films
• Irrigation and drip irrigation, and ways to make deserts blow

The major growth is to be in warmer countries, with at least 10-12 % annual growth

Taking an ecological vision, plastics can also be split into three categories:

• Disposables, less than one year life, 75 million tons of plastics in 2000, 200 million tons in 2020.
• Durables, 5-15 year life, 45 million tons of plastics in 2000, 140 million tons in 2020.
• Infrastructures, over 20 year life, 35 million tons of plastics in 2000, 200 million tons in 2020.

Recycling, to give at least lip service.

Anyway, out of the millions of tons of oil, this miraculous product distilled by Earth over eons of time, only 10 % is used as noble raw material, to make plastics, fibers, rubber, paints, adhesives, coatings, binders, detergents, and many more, with an extraordinary added value between production and end-of-life. In an ideal world, all the oil should be used only as a raw material, not for burning.

Recycling plastics is a myth, an exercise of social correctness, without any hard economic value. Industry says that plastics can be recycled. Environmentalists disagree, they say plastics can only be “down-cycled” in the sense that plastics can only be converted to lower-grade plastic products. The only sensible thing to do with plastics waste is to burn it, along with other waste that it ignites well, and let plastics go back to the fuel definition, after having achieved the whole added value cycle in-between.

New and fast growing plastics, and craze for specialties

Many plastics suppliers policy is to include as much as possible specialties in the portfolio, on the ground that higher prices and added value are better controlled. Specialty means pricing power.

In fact, there are two types of specialties, those that are protected by patents, know-how and other entry barriers, and those that are pseudo specialties. The Internet is going to have a destructive impact on these specialties. Analysts believe that the increased transparency that will result from Internet markets and trading on line capabilities will erode any excess profits in the sector. Whole margins in the commodity chemical markets are generally slim and margins in true specialties are relatively invulnerable, there is an as yet not measured section of the specialty market that may experience a collapse in margins over the next few years.

Remember when they used to say, this was back in the 1980s, that no new polymer, no new molecule, was likely to achieve mass volume commodity status. Then PET happened, and polycarbonate, maybe on this track. Which are going to be the PET and the PC of the next 20 years?

Biodegradable, polylactic polymers PLA
Major impact of metallocenes, not only PE
Revival of polyaliphatic ketones?
Many more alloys
Composites, also with wood and fibers
Nano composites
Mineral polymers, trends to silica polymers

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