On a par with the booming PET bottle segment, thin BOPP film with its outstanding growth rates has been a star performer among plastics packaging applications for the past ten years. Between 1998 and 2002 alone, worldwide consumption of BOPP film rose by an average of 9% every year. According to PCI Films Consulting Ltd (www.pcifilms.com), this represents an increase in absolute terms of about 1.1m t/y. Consumption in 2002 amounted to about 3.2m t with an installed capacity of 3.8m t/y. PCI predicts consumption will rise by 7.7% per year to 4.5m t by 2007. More than half of future market growth is expected to be generated in Asia.

The thin bi-axially oriented films are tear-proof in all directions and are mostly used for food packaging. Processing and labelling of the films is easy and they are equipped with excellent barrier properties against moisture and light. BOPP films are also perfectly suitable for in-mould lamination and metal-plating. Preferred areas of application include dried food, cakes, bread and pastries, sweets and snack food. Special areas of application include packaging for textiles, tobacco goods, flowers and labels. The material is also widely used for the production of adhesive tape and for condensers.

China with excess capacity
According to PCI, European consumption of BOPP film in 2002 represented about 29% of the worldwide total of 910,000 t in absolute figures, with an installed capacity of 1.05m t/y. Central and eastern Europe consumed 85,000 t. This shows that Europe is still the main market for BOPP films. However, as already observed in other segments, growth rates in Asia in general and China in particular, indicate that Asia is likely to outperform Europe over the next five years, the consultants say. China´s installed capacity is currently not utilised to its full potential and is projected to rise to about 1.75 t/y in 2004.

While Chinese producers are gearing up to supply both domestic and non-domestic markets, with the US and Southeast Asia at the top of the list of export customers, European producers are stuck in a rationalisation and consolidation phase. The three-way merger between Dor Films, Moplefan (I-05100 Terni) and Trespaphan (D-65479 Raunheim) at the end of 2002, finally led to the launch of Treofan (www.treofan.com), a new European market leader with a capacity of 170,000 t/y and five European production sites in spring 2003. On a global scale, Treofan with additional BOPP production facilities in Mexico, South Africa and Australia, ranks second after ExxonMobil Chemicals Films (Europe: B-1831 Machelen; www.oppfilms.com) and ahead of Vibac Group (“Vifan”, I-15040 Ticineto; www.vibac.com).

Despite an expected 5% growth per year for the western European market up to 2007, European demand for BOPP films is still displaying unexpected sluggishness, says PCI. Little, if any, growth was predicted for 2003. These conditions and the Chinese capacity increases have put additional pressure on prices, leading to further erosion of film producers´ profitability. Similarly, business at Applied Extrusion Technologies (AET; www.aetfilms.com), US domestic market leader and number five on the global scale of BOPP film producers, was still sagging at the end of last year, despite ongoing production cuts and massive efforts to turn the business around.

PCI predicts a rise in mergers and acquisitions in Asia as a means of remaining competitive. Major players in the Asian BOPP industry are Nanya Plastics (Taiwan; www.npc.com.tw), number four on the global scale of BOPP producers, as well as the top-ten league players Futamura Chemicals (Japan; www.futamura.co.jp) and Thai Film Industries (Thailand; www.thaifilmind.com), followed by Stenta Films (Malaysia), Hong Ming (China) and Trias Sentosa (Indonesia; www.triassentosa.co.id).

German company is global market leader
European machinery manufacturers and German companies in particular are benefiting from the booming Chinese BOPP market. In 2002, Brückner Group (D-83313 Siegsdorf; www.brueckner.de) almost doubled its 2001 sales of EUR 119m to EUR 225m. According to the specialist for film stretching lines, this result represents a 53% share of the global market. According to the company´s balance sheet of 2001 and 2002, the gross yield of EUR 88m improved the profit situation, which now represents a quota of 38.6%. The most recent company assessment sees the current order situation as a clear indicator for a constant development in 2003. Brückner names China, Indonesia, Thailand, India, Dubai, Egypt, Eastern Europe and Latin America as core markets.