As expected with recession hitting Europe in 2008, the Polyethylene (PE) film extrusion industry took a downturn, as per AMI. Between 2007 and 2009, PE film production fell by 1 mln tons. About half of this lost volume was recovered during 2010 and the industry continues to make steady progress in 2011. With a volume demand in excess of 7.5 mln tons for 2010 PE film extrusion still represents one of the largest plastics processing sectors, accounting for 19% of polymer consumption in Europe during 2010. Inevitably the recession has had an impact on the number of companies operating in Europe. Compared with the previous edition of AMI's report there are 5% fewer companies listed with France, the UK, Benelux and Scandinavia seeing the greatest decline in numbers. Producers of carrier bags, heavy duty sacks and building films were worst affected while food packaging suppliers generally performed better as there was less contraction in demand from this sector through the downturn.
The PE film industry within Europe has had to adapt to these changing demands which in turn has seen a shift in the importance of end use applications. Stretch film still remains the largest single application in volume terms. This is due to stretch film becoming one of the most cost effective means of protecting goods while they are in transit. The market for bags and sacks has had differing trends between the various sectors. The demand for carrier bags has seen a steady decline due to environmental pressures, incentives for consumers to reuse bags, shops beginning to charge for carrier bags and increasing volumes of imported bags from Asia. In comparison AMI indicate within their guide that the market for refuse sacks has continued to grow driven the move to more recycling and sorting of domestic waste. A significant change has been the growing demand for more sophisticated multi-layer films and technical coextrusions which now account for 9% of PE film production in Europe, compared with just 5% in AMI's previous edition. In the guide approximately 10% of the companies listed are capable of manufacturing 5 or more multilayer films.
The distribution of PE film production in Europe has not radically changed from the figures quoted in AMI's previous edition of this guide. Italy still has the largest amount of PE film production with Germany a close second. However, in terms of number of companies operating there are over 100 more in Italy compared with Germany, reflecting the more fragmented structure of the industry in Italy. Poland leads the way in Central Europe, accounting for around 50% of film production in the region and the largest number of film extruders.
As the industry moves out of recession AMI forecasts that production will move in line with underlying GDP growth for Europe. An annual average growth of around 2-3% pa would result in an industry processing over 8.7 mln tons by 2015.