Demand for specialty and high performance is substantial in packaging due to excellent barrier properties, high tensile strength and chemical resistance. Growth of packaging industry, particularly flexible packaging industry is expected to drive the demand for these films. In addition, usage of these films in semiconductors which are used in photovoltaic (PV) systems and the growing number of installations of PV systems is further expected to fuel the demand for these films. Global demand for specialty and high performance films is expected to reach 12.2 mln tons in 2019 from 8.3 mln tons in 2012, at a CAGR of 5.7% from 2013 to 2019, according to a report by Transparency Market Research. In terms of revenue, the market was valued at US$27.42 bln in 2012 and is expected to be US$42.21 bln in 2019, growing at a CAGR of 6.4% from 2013 to 2019.
Specialty and high performance films are made of polymers such as polyester, fluoropolymer and polycarbonate, among others. Volatility in the prices of crude oil, which consequently affects the prices of its downstream products, is expected to restrain the demand for specialty and high performance films. Development and commercialization of bio-degradable and water soluble films is expected to open new opportunities for this market as there is a growing demand for eco-friendly products. Use of specialty and high performance films in packaging accounted for over 65% of the market in 2012. Growing demand for packaged goods on account of rising consumer awareness regarding hygiene is consequently expected to drive the market for packaging industry. Rising construction activities in various countries such as USA and Japan and particularly in emerging economies such as China and India has led to a growing demand for light control films. Thus, the construction industry is expected to show the fastest growth over the forecast period. The construction market in Brazil, India, and China is driving the specialty and high performance films market as these films are being demanded for aesthetic and functional purposes. The specialty and high performance films are used by the construction industry for functional purposes such as light control, safety, and security. Demand for specialty and high performance films in Asia Pacific was 3,000.9 kilo tons in 2012. Asia Pacific is expected to show the highest growth over the forecast period on account of growing demand for electronic goods and automobiles. In addition, construction activities are highly prevalent in this region due to rapid industrialization, which is expected to consequently drive the films demand. Growth of medical industry is also likely to drive the specialty and high performance films market in the forecasted period. Growth of packaging and re-construction sectors in developed nations such as North America and Europe are expected to contribute to the growth of specialty and high performance films market. Despite such strong market drivers, the specialty and high performance films market faces some tough challenges such as volatility crude oil prices has a trickling down effect on growth of specialty and high performance films market. However, the specialty and high performance films market could look at development biodegradable and water soluble films to tackle its biggest inhibitor.
Polyester is extensively used in packaging, thus, the demand for polyester specialty and high performance films was highest accounting for approximately 80% of the market in 2012. However, growing number of PV installations all across various developed and developing countries on account of shortage of electricity is expected to boost the demand for polycarbonate films which are an integral part of semiconductor units.
The specialty and high performance films market is adversely affected by high competition and low profit margins. Specialty film manufacturers are going through a period of consolidation to satisfy customers through competitive pricing. Through consolidation, the key players are trying to gain a competitive advantage to manufacture specialty and high performance films marketthat will meet stringent client specifications, which is the only way to enhance their profits margins. To benefit from lowered operational costs and to move closer to the target market, specialty film producers in developed countries have increasingly been shifting their plant and research and developments sites to favourable offshore locations. According to a report, specialty film manufacturers are under pricing pressures, performance pressures, and decreasing margin pressures. They are expected to produce high quality films with distinct performance advantages at competitive prices. To gain a distinct edge in a competitive market, and increase profit margins, specialty film manufacturers are investing heavily in R&D for creating innovative products. This enables key players in the market to differentiate their products through enhanced performance. Possibilities in this area are immense. Manufacturers can bring in new products by developing multilayer film structures, combining low-cost and high-cost films, and through the increased use of bio-based polymers. the global specialty and high-performance films market can be divided into five segments based on application: barrier films, decorative films, microporous films, safety and security films, and other specialty and high-performance Films. TechNavio's analysts forecast the global specialty and high-performance films market will grow at a CAGR of 6.36% over the period 2013-2018.
As per Freedonia, US demand for specialty films is forecast to advance 5.2% pa to US$8 bln in 2017. Gains will be driven by the increasing need for high-performance plastic films which offer barrier properties, mechanical strength, and chemical resistance in packaging applications. Increasing use in small, but high-growth market areas, such as photovoltaic modules and biodegradable packaging, will also bolster advances, as will a rebound in the construction market. Packaging is the largest market for specialty films, accounting for two-thirds of overall demand. Of the specialty film used in packaging, barrier films have the largest share with over 90% of the market. Growth in barrier film demand will be driven by the rapid rise in the use of vacuum packaging, oxygen scavenging, and low-oxygen case-ready technologies in meat packaging, as these technologies utilize high-barrier films to maintain an optimum atmosphere inside the package. Demand for barrier films will also benefit from the increased use of specialty barrier films in pharmaceutical blister packaging applications. A rebound in building construction will benefit safety and security films, as double-digit annual growth in both residential and non residential building spending will boost demand for films used in windows for safety and security as well as light control. The most rapid growth in specialty films, albeit from a small base, will occur in biodegradable and water soluble films, which will benefit as the technologies improve and new applications are developed. Demand for biodegradable films, which are used to produce compostable packaging and bags for organic waste, will benefit from environmental concerns and the increased commercialization of bio-based polymers. Water soluble film demand will receive a boost from the introduction of pharmaceutical and health products in dissolvable thin film form as well as the introduction of edible, water soluble food packaging.