The BOPP film industry continued to show robust growth during 2011 with demand advancing by 5.5% compared with 2010 to top 6 mln tons for the first time according to a latest report on the global BOPP film market from AMI Consulting. Demand growth was slightly down on 2010 which had been the bounce back year from the financial crisis for most markets around the world. Global demand is increasingly being driven by developments in Asia, particularly in China, India and Indonesia. With over 60% of BOPP usage occurring in food packaging, it is the growth in demand in these countries for an ever-widening variety of packaged foods sold through supermarket outlets that is one of the principle drivers for this material. With large, youthful and growing populations, increased urbanisation and rising incomes it is the developing markets of Asia that will continue to underpin growth in BOPP film demand.
AMI's analysis shows that China alone now accounts for 40% of global production and demand and on its own accounted for 2 percentage points of the global growth achieved in 2011. It accounted for 95% of all new capacity installed in 2011. Although production has and will continue to be primarily to serve the domestic market, the volume of output now is such that even modest export volumes have the potential to disrupt other markets. Chinese exports, which AMI estimated were 6% of production in 2011, are largely targeted at neighbouring Asian countries, but material can turn up in any part of the world from time to time. The strongest growing region in 2011 was the Indian sub-continent. The industry is developing here from a relatively low base. Although it has a population comparable with China its per capita consumption of BOPP film is ten-times less that of China. Demand growth is expected to accelerate driven by the opening up of the retail industry to foreign investment and rising income levels increasing demand for packaged foods and consumer goods. At least ten new lines are on order for India and Pakistan for delivery in 2012 and 2013 that will add close to 300,000 tpa new capacity. The region is also growing its exports and AMI believes that 20% of its production was exported during 2011. Other emerging markets in Asia continued to show strong growth in 2011 and attract further investment with new lines coming on stream in Indonesia, Taiwan and Vietnam. There were also capacity increases in Nigeria, Saudi Arabia and Peru.
AMI believes the BOPP film market has the potential to continue growing at a strong rate of 6-7%/year over the next five years. This would add another 2.3 mln tons of demand. As was seen in 2011 the strongest growth is likely to continue to be in India, driven by the development of the organised retail sector opening up to foreign investment; China, driven by government initiatives to increase domestic consumption and raise living standards of its rural poor; and the Middle East and Africa, driven by general economic growth within this resource rich region.