markets feature | BOPET
is an example of how applications can come and go. At the same time, new applications continue to emerge. Photovoltaics, for instance, is a booming application and has seen growth of 29% per year since 2010. This is driven by an increased demand for renewable energy sources, which is often supported by government initiatives. Display films is another application that has seen double digit growth.
Durable media 7%
Industrial 10%
Display films 11%
Electrical 9%
Oversupply through over-investment The BOPET industry has seen large over-invest- ment in China because of its proven, readily available technology and fast market growth. What’s more, state-owned enterprises in China have enjoyed non-cash benefits such as low-interest bank loans and discounts on land, water and electricity. Other investment hotspots included the Middle East, India and North East Asia – particularly South Korea. Investment decisions have been largely driven by increasing demand and a perceived opportunity to substitute imports as well as building substantial export sales. Suppliers in the Middle East have the potential to
become low cost global suppliers, thanks to the region’s low raw material and energy costs. After large scale capacity expansions in recent years, the region has become a significant exporter of BOPET films – mainly to Europe and USA. North East Asia has added 209,000 tonnes to global
capacity since 2010. Much of it has been installed by established South Korean producers who are dedicated to optical grade films for LCD panels, display films for touch screens, and films for photovoltaics. India has installed 130,000 tonnes of new capacity since 2010 – driven by strong local demand for packaged food.
Global BOPET film demand
‘000 tonnes 6,000 5,000 4,000 3,000 2,000 1,000 0
Packaging 57%
Source:
Applied Market Information, 2016
Increasing challenges While global capacity has increased by more than 70% since 2010, demand has risen by only half that amount – which has led to significant oversupply. This scenario, combined with falling crude oil prices,
has led to weak pricing and poor margins – creating a challenging environment for BOPET film producers. Much of the new capacity comes from high productivity, low-cost operations with a focus on flexible packaging. This has put pressure on established businesses, which have older and less efficient assets. This is particularly true for the production of low-cost commodity grades in the developed markets of North America, Europe and North East Asia. Many companies in these regions have shifted their focus to specialised technologies and added value applications. Others, such as DuPont Teijin, have closed obsolete plants. The industry is becoming increasingly fragmented
due to the emergence of new players. Ten years ago, the Top 10 producers accounted for more than 60% of total production; now, that figures is below 50%. There are also many more manufacturers holding smaller market shares. The largest producers worldwide include DuPont Teijin Films, Flex Films, Jiangsu Shuangxing, Mitsubishi Polyester Film, SKC Films and Toray Films. AMI Consulting forecasts that overall demand will
reach 5.2 million tonnes by 2020, a compound annual growth rate (CAGR) of 6%. That said, growth in some developing countries will be well above this. The industry will continue to develop value-added opportu- nities, but to maintain market power industry players must anticipate change and formulate response strategies quickly by directing R&D investment.
2005
Global BOPET film demand to 2020 Source: Applied Market Information, 2016
14 FILM & SHEET EXTRUSION | October 2016 2010 2015 2020
For more information on AMI Consulting’s 2016 global report on BOPET Films, please contact Márta Babits (
mb@amiplastics.com) on +44 (0)117 314 8139.
www.filmandsheet.com
Photovoltaics 4% Other 2%
World end use applications for BOPET films, 2015 – Total market = 3.9m tonnes
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