Technical Papers Plastics
Global masterbatch market to reach US$8.5 bln by 2017

Global masterbatch market to reach US$8.5 bln by 2017

Despite witnessing a temporary deceleration in growth in the years 2008 and 2009, world masterbatch market is forecast to reach US$8.5 billion by the year 2017, as per Global Industry Analysts, Inc. Growth in this market will primarily be driven by resurgence of demand fundamentals, such as, improving income levels, strengthening consumer confidence, growing propensity to spend, continued shift towards packaged products, and increase in the demand for consumer goods, automotives, and electronic appliances among others Masterbatches are omnipresent raw materials used as colorant for plastics. Masterbatches flaunt established consumption patterns, as it is used for a wide range of applications in sectors including sports and leisure, fiber, household, construction, packaging, and automotives. Packaging is a major market for masterbatches, with applications including drums and containers, transport and bottle crates, films, special films, caps and closures, and bottles. In the automotive industry, masterbatches ascertain that the vehicle exteriors as well as interiors exude an enhanced aesthetic appeal and at the same time offer resistance against environmental damages. Prime impetus for masterbatch consumption comes from increasing demand in developing countries coupled with growing consumer preference for advanced color formulations.
Economic recession resulted in reduced demand for masterbatch, not surprising, given the fact that fortunes in this market are tied to the health of key end-use industries such as the automotive industry, construction, fibers, packaging, household, and electrical & electronic industries. Fall in the business confidence index triggered by falling profits, liquidity constraints, and shortages of credit availability, represented common woes that halved investment plans across all end-use sectors, dragging, in the process, the masterbatch market into the red. Packaging end-use sector remained largely weak during the years 2008 through 2010, further depressing the market for masterbatch. As a result of unprecedented weakness in all end-use application markets, which were hit with a general decline in consumer demand brought about by recession induced cost cutting by households faced with shrinking disposable incomes, demand for masterbatch plummeted to hurting levels, during the years 2008 and 2009. The recession has brought out the construction industry, one of the largest end-user of masterbatch, as a major causality with residential and commercial construction activity nose-diving. The sprawling electrical & electronics and appliances industry also succumbed to the inescapable symptoms of the recession, such as, lower discretionary spends and the ensuing weak consumer demand for personal computers, cell phones, cameras, heaters, refrigerators, laundry equipment, radios, TVs, office machines, and electric power equipment, among others. The year 2010 has been another challenging year for masterbatch market due to prolonged structural problems in the financial systems worldwide, overcapacities in major end-use industries, unresolved global trade issues, and high unemployment rates in industrialized zones. The recession, which had caused the market�s growth fundamentals to splinter, has now started to realign with demand already showing signs of recovery. Recovery in GDP growth, employment rates, incomes levels, discretionary incomes, rise in consumer/business confidence, rebound in manufacturing activity and restoration of health to most end-use markets is currently reviving growth in the market. The sheer diversity of application areas for masterbatch provides a quick and easy road for recovery. Improving economic conditions will unleash pent-up demand as hitherto postponed purchase decisions resurge to provide commercial opportunities.

Growing GDP, rapid pace of industrialization, ballooning production and industrial bases, increased output of plastic components, consumer goods and packaging products and continuing penetration of masterbatch vis-�-vis competing coloring methods remain key growth driving forces in the post recession period. Future growth in the international market hinges heavily onto developing economies in Asia-Pacific, Latin America, Eastern Europe, and Middle-East/Africa. China and India, especially, stand out as noteworthy markets, given the mass exodus of production activities (automotive & industrial) from developing countries to low cost Asian countries. The ensuing increase in foreign investments, and rise in the number of new manufacturing establishments will witness Asia-Pacific emerge into a prime driver of growth. The industry, over the past decade witnessed a flurry of mergers and acquisition with large conglomerates acquiring medium to small-scale players to enhance capacity expansions and complementary technologies. The tough economic environment revived a shakeout, as competition intensified, profits dwindled, and survival got tougher. Post recession, the demand for masterbatch is slated to make a comeback, with manufacturers expected to expand their product offerings. Innovation and product diversification based on next generation technology will be the most prominent market strategies for manufacturers and suppliers in the post recession period. The field of biopolymers currently flaunts strong opportunities for future growth in the masterbatch market. Europe and North America account for a major share of the global Masterbatch market. However, with consumption levels for masterbatch in such developed markets nearing saturation, the focus of the global masterbatch industry now shifts towards emerging markets such as Asia-Pacific and Latin America. Developing markets such as Asia, Latin America and the combined market of Middle East & Africa, are projected to display superior growth rates over the analysis period. Rapid pace of industrialization, ballooning production and industrial bases, increased output of plastic components, consumer goods and packaging products and continuing penetration of masterbatch vis-�-vis competing coloring methods remain key growth driving forces in the post recession period. In volume terms, White Masterbatch is the largest revenue contributor. In value terms, global market for masterbatch in packaging sector accounts for a significant share of the market.
 
  Back to Articles

Previous Article

Next Article

{{comment.Name}} made a post.
{{comment.DateTimeStampDisplay}}

{{comment.Comments}}

COMMENTS

0

There are no comments to display. Be the first one to comment!

*

Name Required.

*

Email Id Required.

Email Id Not Valid.

*

Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.
*

Message Required.

Click to Change image  Refresh Captcha

telluswhatyouwant

used-plastics-Machinery-required