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Global bioplastics market expected to reach US$7.7 bln by 2016 at a CAGR of 24.3%

Global bioplastics market expected to reach US$7.7 bln by 2016 at a CAGR of 24.3%

28-Aug-13

The global bioplastics market is expected to reach US$7.7 billion by 2016 at a CAGR of 24.3%, as per a report by Research and Markets. Region-wise analysis shows that Asia-Pacific is forecaste to record the highest growth rate of 25.7% during the analysis period 2011-2016. The Americas follow Asia-Pacific with a CAGR of 25.2%. Europe forecasts to drive with a growth rate of 23.5%. Volume based studies reveal that Europe is expected to overcome Asia-Pacific region in terms of the growth rate. Polyesters and Polyolefins are expected to drive the growth. Among the end-users, electronic and electrical industries are expected to have a better support over packaging industry.

Another report by TechNavio forecast the global biodegradable plastics market to grow at a CAGR of 19.6% over the period 2012-2016. One of the key factors contributing to this market growth is the increasing demand for more eco-friendly packaging materials. The growth of the packaging industry is influenced by the need for non-toxic biodegradable plastics, which in turn has resulted in the increased demand for biodegradable plastics. This market has also been witnessing the increased investment in new plants and research facilities for developing new biodegradable plastics in a cost effective manner. However, the high production costs associated with biodegradable plastics, which in turn results in the rise of finished product prices could pose a challenge to the growth of this market. The major trend witnessed by the global biodegradable plastics market is the adoption of citywide composting by big cities around the world, particularly in North America and Western Europe. These cities have realized the need for reduction in greenhouse gas emissions by decreasing the waste materials disposed in landfills and incinerators. Since, biodegradable plastics can be easily composted in a period of few months, the space used for landfills have reduced dramatically. This will result in reduction of methane emission to the atmosphere. Decrease in the release of methane in the environment, which is about 72 times more potent than carbon dioxide as a greenhouse gas over a period of 20 years, will reduce the detrimental effects of plastics on the environment.

A study released by Transparency Market Research predicts that the market for biodegradable plastics will be worth nearly US$7.8 bln by 2018, almost quadrupling from its current value of US$2.3 bln.  Biodegradable plastics cover both synthetic (petroleum derived) and renewable (bio-based) materials, but the growth will be in the latter as it is considered a more sustainable option. Although the synthetic plastics market is growing at a steady pace, it lags behind bio-based alternatives and is experiencing a decreasing market share. The bio-based market is segmented on the basis of its types as starch based plastics, polylactic acid (PLA) and polyhydroxyalkanoates (PHA). This sector alone is expected to reach a value of US$7 bln over the next six years.  Major brands such as Coca-Cola are now looking to exploit greater use of plant-based materials for use in packaging - the drink company announced last year it was entering into partnerships with biotech companies to develop commercial solutions for its next-generation of PlantBottle ™.  Other factors underpinning the growth of such materials are cheap feedstock supply and consumer acceptance. Globally, the main end-markets for biodegradable plastics are in packaging, agriculture and transportation.

As per Research In China, under the influence of environmental pollution, severe waste of resources and other factors, biodegradable plastics industry has been a great concern over recent years. Global biodegradable plastics capacity in 2012 exceeded one mln tons. However, affected by product performance, exorbitant prices, etc., the actual demand for biodegradable plastics around the world is only 760,000 tons or so, less than 1% of the overall plastics market demand, revealing a huge market space for biodegradable plastics industry. Currently, starch-based plastics, polylactic acid (PLA) and polybutylene succinate (PBS) plastics as the world’s three major types of biodegradable plastics occupy about 90% of the total capacity. The first developed starch-based biodegradable plastics has the most mature technology, accounting for approximately 41% of the world’s total biodegradable plastics capacity, but inferior to PLA, PBS, PHA and other varieties in performance. Following the advances in technology research and development, PLA, PBS, etc. will usher in a gradually swelling market; it is expected that by 2015 PLA and PBS products will account for a total of 55% of the global biodegradable plastics capacity. China’s biodegradable plastics industry development under the stimulus of many favorable factors, is also beginning to take shape. In 2012, there have been about a dozen manufacturers with total capacity up to 301,000 tpa, accompanied by a CAGR of 27.3% in 2009-2012. Kingfa Technology Inc., Wuhan Huali Environmental Technology Co., Ltd., Shenzhen Esun Industrial Co., Ltd., etc. have realized 10,000 tpa scale biodegradable plastics production, covering PBS series, starch-based biodegradable plastics and PLA series. According to information publicized by companies, the production of Chinese biodegradable plastics is expected to hit 650,000 tpa by 2015. Among them, the newly-built 10,000 tpa PBS Project of Youth Chemical Co., Ltd., a subsidiary of Jiangsu Yangnong Chemical Group, started construction in 2011, expected to be completed and commissioned in 2013; In September 2012, Zibo Qixiang Tengda Chemical Co., Ltd raised funds for new 150,000 tpa PBS devices and raw materials related devices through non-public offering of stock, with a total construction period of 2.5 years.

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