The global molded plastics market is dominated by companies such as BASF, Chevron Phillips Chemical Company LLC, Eastman Chemical Company, and Huntsman International LLC, states Transparency Market Research (TMR). However, the market is marked by a high degree of fragmentation due to the presence of a large number of local players in each region.
“Business expansion in Asia Pacific is one of the key growth strategies that top players in this market are focused on,” says a TMR analyst. For example, BASF has formulated a strategy called Asia Pacific Strategy 2020, which is aimed at expanding the company’s business in Asia Pacific. The strategy involves increasing the R&D personnel in the region from 800 in 2012 to 3,500 by 2020. Such developments will lead to other companies following suit in devising similar strategies.
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Investments for facility improvements is also a major growth model for key players in this market. This involves upgrading process controls, automation, and extrusion technology for increasing the overall production capacity. Acquisitions and joint ventures are also on top of the growth plans of key players in this market. This is aimed for the acquiring company to expand its geographical presence and establish a diverse portfolio, which in turn helps to increase business revenue.
Price Volatility of Crude Oil Challenges Market Growth
TMR analyst points, “Increasing consumption of plastics in automotive is a key factor contributing to the growth of the global molded plastics market.” The various parts of automobiles such as chassis, interior and external furnishings, electronic and digital components require different types of plastics during various stages of production. Since the introduction of plastics in Europe’s automotive industry in the 1970s, the usage of plastics has been steadily increasing to manufacture light weight vehicles with higher fuel efficiency.
Increasing demand for plastic components in mobile phones is also a major factor driving this market. Materials such as plastics and glass are increasingly replacing metals due to an increasing preference for lightweight devices.
The increasing use of rigid plastics for household needs is also fuelling the growth of this market. Rigid plastics such as bottles and cans are increasingly being used for storage purposes.
“Fluctuating crude oil prices is a major factor hampering the demand for plastics,” says TMR analyst. Crude oil is the basic feedstock used in the manufacture of a large number of polymers and chemicals. The price volatility of crude oil results in price fluctuations and availability of naphtha, which is the major component from which majority of plastics are derived.
Environmental concerns pertaining to the use of plastics is also hampering the growth of this market. In recent years, rising awareness about safeguarding the environment is the major factor lowering the demand for plastics. Governmental regulations in place, particularly in North America and Europe is keeping a strict watch on the production, usage, and disposal of plastics.
Consumables and Electronics to Offer Most Promising Growth Opportunities
The global molded plastics market is expected to reach a valuation of US$352.37 bn by 2019, says TMR. Molded polyethylene stood as the leading product segment of the overall market in 2012. The segment is expected to display the fastest growth rate owing to the flourishing packaging industry in India, China, and Brazil.
Consumables and electronics is expected to display a substantial demand for molded plastics. This application segment is expected to surpass the market share of packaging application, which was the leading application segment in 2012.
The information presented in this review is based on a Transparency Market Research report, titled “Molded Plastics Market - Global Forecast, Market Share, Size, Growth and Industry Analysis, 2013 - 2019.”
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