The global engineering plastics market is growing, boosted by the increasing demand from the Asia-Pacific (APAC) region. Analysis from Frost & Sullivan finds that the market earned revenues of US$58.63 bln in 2013 and estimates this to reach US$86.42 bln in 2020. Critical success factors for plastics market participants include competitive pricing, enhancing the properties of engineering plastics, developing new and niche applications such as medical and other specialty grades, differentiating products, for instance offering bio-based materials, partnering with customers, especially OEMs, to help develop proprietary technologies. "As the global hub for low-cost manufacturing, Asia-Pacific has become the largest consumer of engineering plastics," said Frost & Sullivan Chemicals, Materials & Food Senior Research Analyst Soundarya Shankar. "Production upsurge, especially in countries such as the Philippines, Vietnam, and Thailand further enhance the attractiveness of this region for engineering plastics manufacturers."
However, overall market momentum may be affected by the trend towards miniaturization of electrical and electronics components. The electrical and electronics end-user segment accounts for the largest volume share globally and consumer preference for smaller and sleeker electronic products will affect consumption volume. Transportation is the next biggest end-user segment. The ongoing metal substitution trend is expected to keep the market growing for engineering plastics in this end-user segment. Trends such as light weighting, use of recyclable materials, fuel efficiency, and advanced vehicle designs will continue to drive the automotive sector. The increase in electric vehicle production will likely impact the growth for engineering plastics in the forecast period.
The consumer goods end-user segment holds a significant volume share and is expected to post low growth rates because of maturity. The commoditized nature of this end-user segment poses a challenge of reduced profit margins for companies. The increased spending capacity in APAC, which is increasing the demand for production of consumer goods, will fuel growth in this end-user segment. Construction is the highest growth end-user segment in the engineering plastics market. Growth is spurred by increasing construction activities in APAC.
Low-volume end-user segments such as medical will witness increased penetration of engineering plastics, aided by the development of new medical grades. Light weighting is a prevalent trend in the segment, which will further enhance the demand for engineering plastics. The growth of other low-volume packaging will depend on the segment. While some product segments are expected to post mature growth, products such as PMMA are expected to post high growth rates. "Further, some plastics such as ABS, PC, and polyamides are becoming commoditized," observed Shankar. "To combat maturity of these segments and slowdown in traditional markets such as North America and Europe, many resin makers are developing advanced grades of plastics to open up a new range of applications." Product segments such as polymethyl methacrylate (PMMA), polycarbonate (PC) and polybutylene terephthalate (PBT) are expected to post high growth rates between 2014 and 2020. Acrylonitrile butadiene styrene (ABS) is the biggest product segment in the market; however, it is highly commoditized and expected to post the lowest growth rate.
As per Ken Research Private, the concept of engineering plastics has witnessed rapid evolvement in both developed and developing countries in the Asia Pacific region. This has been mainly due to its superior features of metal substitution and lower weight. The engineering plastics industry in Asia Pacific region has grown at a CAGR of 12.5% from 2008 to 2013, with revenues expected to grow at a CAGR of 13.8% during the period 2013-2018. In more developed markets of the Asia-Pacific region, including countries such as Japan, South Korea and China, the offerings from the market players are expected to be diverse, focused mainly on customized demands. Additionally, the market is predicted to witness expansion in terms of the newer forms of engineering plastics resins, coupled with the development of their newer applications in end user industries.
The Chinese economy has entered into an inimitable stage of development, under which the economic growth has been slowing down, but the country has been heading towards a more sustainable path. Engineering plastics has been one of the major sectors which have escalated at a rapid pace in China over the last few years, especially since 2005. The overall market revenues of China engineering plastics resin market has enhanced at a substantial CAGR of 13.6% during the period 2008-2013. Engineering plastic industry in China has been primarily dominated by the Polyethylene Terephthalate (PET). This market is expected to see revenues at US$242 bln by 2018.
Japan engineering plastic market revenues has deteriorated at a CAGR of 3.6% from 2008 to 2013, but is likely to augment at a positive yet slow CAGR of 1.7% during 2013-2018, supported by surging growth of end user industries majorly automotive and electrical and electronics equipment industries.
The engineering plastics industry of India has substantial growth potential in the country, since untapped opportunities still exist for metal replacement in cars, trucks, consumer appliances as well as in other applications. India engineering plastic market has considerably enhanced at a healthy CAGR of 25% during the period FY09-FY14. Market revenues in the future are expected to augment at a CAGR of over 20% from FY14-FY19, reaching revenue worth US$5 bln in FY19.
Engineering plastic industry in India has been primarily dominated by the Polyethylene Terephthalate (PET). ABS is the second largest engineering plastic segment in India, owing to its widespread applications in automotive industry, which has been growing at a very rapid pace, determined by the surge in personal disposable incomes as well as busier lifestyle. The global demand for ABS and SAN resin is about 18 mln tons as recorded during FY10.
Over the years, automotive and transportation applications industry has realized the importance of engineering plastics over metals due to massive reduction in vehicle weight, supplemented with lower production costs.
The competition in the engineering plastic market has been largely captured by few major players such as DSM engineering plastics, BASF India, Bhansali Engineering Polymers, Styrolution India and several others. These players have commanded a sizeable market share in the overall engineering plastic market, despite of having a number of SMEs operating under this business, as per Ken Research Private.