Plastic Processing continues to advance in Central Europe

19-Dec-08
Central European countries have been experiencing strong economic growth over the last 5 years as a result of both the benefits of the EU membership and a relocation of many production facilities (and/or establishing new ones) eastwards by Western European manufacturers in a bid to improve profit and follow their customers. The main advantages are a large, skilled workforce prepared to work for lower wages; systems are far less bureaucratic than couple of years ago and the geographical central locations make them ideally placed to serve both markets in the West and the growing markets to the East. AMI estimates that the total polymer demand in 2008 in these four countries accounts for some 4.28 mln tons. Poland is the largest market represented by more than 1,700 companies involved in plastics processing, with approximately 70% of them listed in the report. Since Poland joined the EU in 2004, demand has continued to advance at an average of 7%/year. Polymer demand has been driven by high levels of investment particularly in packaging, appliances, consumer electronics and automotive. The country has long been an attractive location for foreign investment thanks to its low-cost yet highly skilled work force and its proximity to West European markets. With an estimated 2008 polymer demand of more than 2.3 mln tons and then a consumption of 61 kg/capita, Poland is well ahead of the average for Central and Eastern Europe of 45 kg/capita but still some way behind the average for Western Europe of 88 kg/capita. The largest number of processors is in the injection moulding sector and it is estimated that 52% of all processors carry out injection moulding. The most important processing market in terms of volume of material consumed is film extrusion. Another directory is devoted to the plastic processing in the Czech and Slovak Republics. The Czech plastics market, underpinned by strong economic growth in recent years, has been growing by an average rate of approximately 7%/year, to reach almost 770,000 tons in 2007 and is expected be just short of 800,000 tonnes in 2008. Economic growth has been driven by the strong performance of exports since the Czech Republic joined the EU and growth in foreign and domestic investments. The polymer consumption, with just over 70 kg/capita, is driven particularly by packaging, automotive and appliance industries. There are believed to be around 640 processors of plastics in the Czech Republic (this report lists nearly 500). Injection moulding is the largest plastic process used regarding the number of processors in the Czech Republic to a large extent encouraged by the high level of FDI especially in the automotive industry. Czech, Slovak and international moulders, including Visteon, Key Plastics, Möllertech, Faurecia, Plastic Omnium, Delphi and Hanwha, have benefited from new plants established by Hyundai and Kia in the Czech-Slovak cross-border region. The Slovak plastics industry is following a similar path of its neighbours and supported by record GDP growth it has been expanding rapidly over the past few years. It is estimated that there are more than 130 companies involved in thermoplastics processing in the Slovak Republic. Polymer demand has been growing on an average by 9%/year to 375,000 tons in 2007 and according to AMI estimates it will reach almost 400,000 tons in 2008. Similar to other Central European countries Slovak plastics processing is largely influenced by automotive investments which have made Slovakia become a country with the largest per capita production of cars in the world. However, film production represents marginally the largest process sector by volume and also includes a more limited number of the larger companies. With the acceptance of Euro scheduled for January 2009, the Slovak plastics industry is expected to continue benefiting from investment flows coming into the country. Hungary, which is researched in the third of AMI's reports, enjoyed strong economic growth after its accession to the EU in May 2004 but annual average GDP growth slowed in 2007 and was slower again in 2008, forecast to be only 2% for the year - the weakest in the region. A high tax regime and an unstable business environment have led to dramatic falls in foreign direct investment (FDI). For 2007 polymer demand growth was just over 5% pushing volumes up over 745,000 tons and for 2008 AMI is currently forecasting a further sharp slowdown in growth to less than 2%. There are believed to be over 600 plastics processors in Hungary (AMI list 334 of the most important ones in this report). Hungary's largest processing market is film extrusion which accounted for 24% of the total demand for thermoplastics in 2008. Major extruders of PE film are Partium 70, Nordenia Hungaria, Kabaplast and Rotapack). BOPP production is now carried out by Taghleef Industries, which acquired the Radici film operations in 2008. Injection moulding is the second largest processing market for thermoplastics supplying predominantly the telectronics, electrical, packaging and automotive industries. Car production is not as significant in Hungary as elsewhere in Central Europe.
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