Asia demand continues to bolster BOPP market

The global Biaxially Oriented Polypropylene (BOPP) film market has seen demand grow by just under 5 per cent per annum over the last five years, reports Wood Mackenzie in a recent report. The main driver of growth has been the demand for flexible packaging, particularly in China and South East Asia.

The BOPP film industry, worth in the region of $15 billion, delivered more than 8.4 million tonnes in 2018. The global market is currently well supplied, dominated by China and the growing influence of Indian-owned producers who continue to expand their operations globally.

Global demand for BOPP film is expected to grow at a healthy rate of 4.7 per cent per year over the next five years to 2023. Forecast growth in Asia is expected to be significantly higher, particularly in China and India where Wood Mackenzie expects to see growth of 6.3 per cent and 9.4 per cent per year respectively.

The issue of recycling and sustainability has, in certain applications, favoured BOPP film over other polymer films. Multinational brands are looking to film producers and converters to provide mono-material plastics packaging solutions to meet sustainability commitments.

“Global BOPP film demand continues to see healthy growth despite the backlash against plastics packaging,” said Robert Gilfillan, Wood Mackenzie’s head of films and flexibles. “In fact, the issue of recycling and sustainability has created a favourable set of circumstances for the BOPP film sector. As part of a circular economy, brands are being pressured to find more environmentally-friendly ways of packaging their products. This has caused a shift in focus from multi-material and multi-layer laminates, which are currently non-recyclable, to mono-material laminates.

“The fact that BOPP film is part of the wider polyolefin chemical family means it can be laminated, with polyethylene film for example, and still be widely accepted in today’s recycling waste stream. Our research indicates that, in certain applications, the consumption of BOPP film has benefitted from this sustainability drive at the expense of other polymers.”

Flexible packaging will continue to be the key end-use sector for BOPP film. The need for transparent commodity film, which is often used in food packaging, is expected to drive future demand. With a positive short-term outlook, investment opportunities within the sector are becoming more attractive.

“In terms of significant M&A activity, 2018 saw Jindal Poly Films become the global leader in BOPP film production by installed capacity, as it completed the acquisition of Treofan’s European operations. The technical expertise gained by Jindal Poly Films through this deal added significant production capabilities to its global network. The deal completed Treofan’s exit from the BOPP film sector, having earlier sold its Mexican manufacturing facility and US sales operations to CCL Industries (Innovia Films).

“Earlier this year, we saw another significant M&A deal take place. Taghleef Industries completed its acquisition of Biofilm, the second largest BOPP film producer in Latin America. This has strengthened the company’s position in the Central & South American region. Additionally, Taghleef Industries has now climbed into the list of top five global players, by installed nameplate capacity,” he concluded.