|Asia is the fastest growing and most dynamic market for thermoplastic masterbatch products in the world, as per a report from industry consultants, AMI Consulting. Despite the impact of the global recession, demand for masterbatch products has continued to power ahead in the region and is forecast to continue growing by over 7% pa. The most significant driver of this demand is the continuing expansion and rapid development of the market in China. China is the dominant force in the Asian masterbatch industry accounting for around 60% of demand and production.
In China, masterbatch production has grown rapidly over the past 5 years more than doubling to meet a comparable increase in demand. Over the same time, China has moved from being a net importer to a net exporter of masterbatch which is starting to have a profound influence on its Asian neighbours with increasing volumes being exported (often at very competitive prices). China is now a net exporter of all main masterbatch types with the exception of additive varieties where the investment in production has lagged the 30% pa growth there has been for additive masterbatch in China over the past five years. Additive masterbatch demand is expected to be a strong growth driver for the Chinese masterbatch industry going forward as processors and end users demand greater functionality and performance from products. Other markets will primarily be driven by their use in consumer products and packaging and a continuing shift away from the direct use of pigments and dry blends.
South Korea and Thailand are the other significant masterbatch markets, accounting for 11% and 9% of the regional demand respectively. Both have well developed markets for masterbatch as the local processing industry is relatively sophisticated generally operating to high standards. A strong growth market in recent years, although starting from a relatively small base, has been Vietnam where there has significant growth in plastics processing. However, the use of masterbatch is still relatively unsophisticated, but it has already attracted a number of foreign investors for masterbatch production such as Clariant and Culamix.
In general, though, plastics processors in Asia are increasingly demanding more sophisticated products and raw materials. All of this has had an impact on the masterbatch industry with companies becoming more technically advanced in their product development and switching away from the use of dry pigments or compounds. In terms of the structure of demand Asia has a slightly higher requirement for colour masterbatch compared to black or white, reflecting the wide demand for colours for consumer product manufacturing in the region. A significant proportion of the additive masterbatch demand is accounted for by the use of anti-fibrillation masterbatch for the woven flat yarn raffia market. Although there is expected to be some slowing in growth rates for masterbatch in Asia going forward, there remains significant room for further development of the market in the region. Future demand will be fuelled by the twin trends of increased production of plastic components, packaging, consumer goods and other products in the region and the continuing penetration of masterbatch versus competing colouring methods. The impact of the recession has been relatively muted in most Asian countries and demand for masterbatch continued to grow last year at around 6% and is expected to advance at between 7-8% pa to 2013 giving rise to a total demand for the region of over 1.2 mln tons.
The outlook of masterbatches in this region is quite buoyant. Demand pattern in this region is quite diverse with countries like Korea, Singapore and Taiwan having scope for growth of sophisticated masterbatches, while countries like Vietnam constitute a small but rapidly growing market. According to AMI, it is estimated that masterbatches will grow over 8% through 2013 in these countries. 2008 saw a growth of 8% despite an economic slowdown, supported by robust growth in the automotive and electrical sector. Demand is stronger for large commodity masterbatches in China where coloring with masterbatch is quite prevalent. Growth of packaging sector has helped in growth of masterbatches. China accounted for over half of the near 800,000 ton consumption of masterbatch in the region in 2008. Most of China�s 500 masterbatch producers are small-sized enterprises, although the 50 leading companies control roughly half of local masterbatch production. Most of the plants, whether operated by a local or an international company, serve relatively local markets. Due to poor logistics and little long-distance supply, the researchers say it is not possible to speak of a homogenous Chinese market. US-based Cabot Plastics is the country�s leading masterbatch producer. The market for colour masterbatch, by contrast, is more diversified, split among the two Chinese producers Yangxi Huaqiang Color Masterbatch Factory and Guangdong Charming Company, as well as global players PolyOne and Clariant. Shantou Meilian Chemical remains China�s leading white masterbatch producer, whereas A. Schulman heads the list of additive manufacturers. In value terms, by contrast, the leading producer is Ngai Hing Hong, whose portfolio includes the full range of black, white, colour and additive. South Korea, the second largest market in Asia, accounted for around 13% of demand in 2010. It has a well developed market as local processing is relatively sophisticated and operates at Western and Japanese standards. Leading suppliers include Cho Yang, Clariant and Toyo. Taiwan, another leading market, has seen slower growth as plastics processing has been relocating to the Chinese Mainland and elsewhere in Asia, where Taiwanese masterbatch companies have been expanding production. One of the leading producers is Cheng Feng Enterprises, which has plants in China and Vietnam as well as several sites in Taiwan as it has been difficult for foreign companies to penetrate the market which developed at an early stage with locally-owned firms. Taiwan market has relatively lower foreign investment. The largest and most significant foreign investment is that of Clariant. In addition to Cheng Feng, other leading suppliers include Nan Tsan Industry and Ta Chung. The largest masterbatch producer in Thailand is Ampacet, producing white and additive masterbatch. Ampacet has substantially increased its capacity in recent years to add colour and additive products. It primarily makes colour masterbatch for the local market and white and additive more for export markets. The performance of the masterbatch market in Thailand in 2008 was one of the weakest in the region. The most rapid growth has been seen in Vietnam where there have been very strong increases in plastics processing over the past five years, although the use of masterbatch products is relatively unsophisticated with the market similar to that of China 20 years ago.