Report suggests flexibility of plastics outweighs costs

Related tags Injection moulding Polystyrene

An analysis of the plastics industry suggests that the versatility
and flexibility of the material is still of great benefit to
packaging firms despite high raw material costs.

Packaging, the largest end-use sector for plastics, relies on different techniques to achieve the varied qualities and assortment of packaging materials. For more complex parts, the primary process is extrusion, followed by injection moulding.

Blow moulding is also extensively used in the manufacture of packaging products along with processes such as thermoset - compression and transfer moulding and reaction injection moulding. Packaging firms are increasingly looking for ways to differentiate their products in the face of stiffening competition, and innovative packaging is one means of achieving this.

"The growing importance of technology in plastic applications and changing regulations is compelling participants to be fully equipped with the latest technical and market knowledge,"​ said Frost & Sullivan senior technical insights analyst Dr. Donald V. Dr. Rosato.

"Participants need to consistently upgrade in an intensely competitive scenario coupled with constantly changing scientific landscape."

According to the Frost & Sullivan report, plastic's adaptability also enables companies to offer economical, highly durable and lightweight solutions.

"This factor is also evident in segments such as transportation where plastic offers fuel savings, design flexibility and high performance at lower costs,"​ said Rosato.

"These benefits are particularly useful to designers that face complex transportation needs whether on land or sea, in the air or space."

Plastics are also being used extensively for their corrosion resistance, toughness, ease of colouring, finishing, resilience as well as their ability to save a large amount of fuel annually due to their lightweight.

This tremendous flexibility can be attributed to numerous sophisticated processes involved in plastics' production, compounding, or distribution. The procedures vary from specialty applications to commodity and semi-commodity segments, and impact the final products to a large extent.

But despite such flexibility and innovation, the packaging industry has had to cope with a series of significant raw material cost rises. The cost of natural gas and petroleum, the starting point for the production of many types of packaging resins, have increased consistently over the past 12 months.

Benzene, which is directly affected by oil prices, is used to make styrene. The price of benzene has now reached historically high levels - prices have been rising steadily since the start of the year, and are now double what they were six months ago.

This has had an inevitable knock-on effect on the cost of manufacturing packaging materials, and resin manufacturers have been passing these higher costs on. Nova increased the price of its styrene monomer by $0.10 per pound, the price of polystyrene resins by $0.12 per pound and the price of expandable polystyrene resins by $0.10 per pound from the middle of August 2004, in addition to all other previously announced price increases.

The Frost & Sullivan report points out though that the diversity of plastics applications means that the sector has been able to diversify in order to mitigate these costs. While some manufacturers prefer to focus on exclusive markets, a large majority has opted to spread themselves out over a larger number of application areas.

This adaptability also mirrors the technical development capabilities of plastic processors, reflecting equipment and huge investment made in the plastics industry. The scale and range of integration come into play when processors develop end-use plastic application strategies.

Frost & Sullivan​ is an international consultancy with market expertise covering a broad spectrum of industries.

Related topics Processing & Packaging

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