Plastics Compounding: A World of Change?
The plastics compounding industry is not immune from the significant changes impacting plastics materials; indeed, the evolution of the market will benefit from a number of the dynamic influences changing the market. The major trends changing the compounding world at present are:
Slower economic growth, especially in the developed world
Rationalisation of polymer supply in commodity and technical resins
High cost of new polymer development
Rapid introduction of new manufacturing technology among customers
Move to more recycled feedstock
A shifting ‘global’ market, with worldwide specification and local sourcing competing
An understanding of these factors will help companies realise the opportunities offered to the plastics compounding industry. This is especially valid for the engineering polymers which make up a disproportionate share of the base feedstocks in the compounding of plastics (compared with overall global resin demand), as illustrated in the chart below.
Compounding of Plastics – Global Demand, 2021 | The Global Plastics Seminar Report 2022
© BPI Publishing International Ltd.
The positive for the plastics compounding industry is that it is made up of over 7,350 companies around the world, all of whom have a variety of differing business strategies and focus. But one clear characteristic is a growing cohort of companies – both integrated and independent – who are driven by a strategy of serving strategic global accounts. The counterpoint to this is that most companies compounding plastics continue to service a more restricted geographic area, with targeted products and nuanced services.
Compounding of Plastics – Global End Use Applications, 2021 | The Global Plastics Seminar Report 2022
© BPI Publishing International Ltd.
The conclusion is that a more coherent world market is emerging, the main effect of which is to concentrate output on larger scale units located close to customers. The future of the plastics compounding industry looks bright. There continue to be opportunities in all regions of the world, while the skills companies possess in terms of a wide-ranging knowledge of polymers and additives enable them to produce higher specification final products while also utilising a variety of virgin and recycled raw materials.